Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)
=350,000/1.07+475,000/1.07^2+500,000/1.07^3+450,000/1.07^4
=1493437.98
NPV=Present value of inflows-Present value of outflows
=1493437.98-400,000
=$1093438(Approx).
Hence since NPV is positive;project must be accepted.
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