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If The WeLoveFinanceSoMuch Company invests in the following 4-year project, by what amount is the value...

If The WeLoveFinanceSoMuch Company invests in the following 4-year project, by what amount is the value of the company expected to change? Assume a cost of capital of 7%.
Estimated end-of-year cash Flows:
Year 0 (today) -$180,000
Year 1 $56,000
Year 2 $42,000
Year 3 $31,000
Year 4 $91,000
b) Should the company accept or reject it?

Please show all work using the TI BAII Plus Calculator like the example below:

Make sure that 2nd I/Y which is P/Y is set to 1.0.
Make sure that 2nd PMT which is BGN is set to END (not BGN).

10 N
7    I/Y
50 PMT
1000 FV
Cpt PV
$859.53 is today’s value of the bond.

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Homework Answers

Answer #1

HERE WE HAVE TO WRITE STEPS FOR "NPV" AS THIS IS NOT BOND VALUATION.

I HAVE SHOWN ALL STEPS

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Answer #1

HERE WE HAVE TO WRITE STEPS FOR "NPV" AS THIS IS NOT BOND VALUATION.

I HAVE SHOWN ALL STEPS

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