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Compute the NPV for Project M if the appropriate cost of capital is 8 percent. (Do not round intermediate calculations and ro

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Answer #1

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=350/1.08+480/1.08^2+520/1.08^3+600/1.08^4+100/1.08^5

=1657.47

NPV=Present value of inflows-Present value of outflows

=1657.47-$1000

=657.47(Approx).

Hence since NPV is positive;project must be accepted.

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