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I would like to expand my business by creating a new production line. Today, I hired a consultant to plan the project, at a cost of 200,000. In the first year, I spent $800,000 on new machinery. In the second year, I made $125,000. In the third year, I made $200,000. In the fourth year, I made $ 360,000. In the fifth year, I made $620,000. During years 6-8, I made $540,000 each year. Assuming a discount rate of 7.1%, what was the NPV of this project? Question $973,179 $1,242,275 None of these $1,042,275

I would like to expand my business by creating a new production line. Today, I hired a consultant to plan the project, at a cost of 200,000. In the first year, I spent $800,000 on new machinery. In the second year, I made $125,000. In the third year, I made $200,000. In the fourth year, I made $ 360,000. In the fifth year, I made $620,000. During years 6-8, I made $540,000 each year. Assuming a discount rate of 7.1%, what was the NPV of this project? Question $973,179 $1,242,275 None of these $1,042,275

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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I would like to expand my business by creating a new production line. Today, I hired a consultant to plan the project, at a cost of 200,000. In the first year, I spent $800,000 on new machinery. In the second year, I made $125,000. In the third year, I made $200,000. In the fourth year, I made $ 360,000. In the fifth year, I made $620,000. During years 6-8, I made $540,000 each year. Assuming a discount rate of 7.1%, what was the NPV of this project? Question $973,179 $1,242,275 None of these $1,042,275
Transcribed Image Text:I would like to expand my business by creating a new production line. Today, I hired a consultant to plan the project, at a cost of 200,000. In the first year, I spent $800,000 on new machinery. In the second year, I made $125,000. In the third year, I made $200,000. In the fourth year, I made $ 360,000. In the fifth year, I made $620,000. During years 6-8, I made $540,000 each year. Assuming a discount rate of 7.1%, what was the NPV of this project? Question $973,179 $1,242,275 None of these $1,042,275
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