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7. You start up a new business and your minimum expected return on capital is 10%. You expect after tax cash flows of $50,000

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Answer #1

Present value of cash flow = 100000 * (P/A, 10%, 10) - 50000 * (P/F, 10%,10)

= 100000 * 6.144567 - 50000 * 0.909091

= 569002.17

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