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Sloan Inc. recently invested in a project with a 3-year life span. The net present value...

Sloan Inc. recently invested in a project with a 3-year life span. The net present value was $9,000 and annual cash inflows were $21,000 for year 1; $24,000 for year 2; and $27,000 for year 3. The initial investment for the project, assuming a 15% required rate of return, was Present Value PV of an Annuity Year of 1 at 15% of 1 at 15% 1 .870 .870 2 .756 1.626 3 .658 2.283

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Answer #1
Calculation of the initial Investment
Net Present Value = Present Value of Cash Inflows- Cash Outflows
9000 = 21000*.870+24000*.756+27000*.658-Initial Investment
9000= 18270+18144+17766- Initial Investment
9000= 54180- Initial Investment
Initial Investment = 54180-9000
Initial Investment 45180
The Initial Investment is $45,180
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