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5) The annual cash inflows that will be produced widespread and continuously over a period of t year after an investment withPlease do not make any tables.

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Answer #1

We will discount cash flows using the 6% discount rate to calculate the net present value of the investment.

NPV = -initial cash outflow + cash inflow / (1+discount rate)^n

NPV = -$40,000 +$8,000/1.06 + $8,000/(1.06)^2 + $8,000/(1.06)^3 + $8,000/(1.06)^4 + $8,000/(1.06)^5 + $8,000/(1.06)^6 + $8,000/(1.06)^7 + $8,000/(1.06)^8

=$18,880.70

The net present value of the investment is $18,880.70

Do let me know in the comment section in case of any doubt.

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