Management of TSC, Inc. is evaluating a new $71,000 investment with the following estimated cash flows: Year Cash Flow 1 $ 20,000 2 31,000 3 37,000 4 51,000 The firm's cost of capital is 12 percent and the project will require that the firm spend $14,000 to terminate the project. Use Appendix B to answer the question. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. The NPV of the investment is $. Should the firm make the investment? The firm Select make the investment.

Management of TSC, Inc. is evaluating a new $71,000 investment with the following estimated cash flows: Year Cash Flow 1 $ 20,000 2 31,000 3 37,000 4 51,000 The firm's cost of capital is 12 percent and the project will require that the firm spend $14,000 to terminate the project. Use Appendix B to answer the question. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. The NPV of the investment is $. Should the firm make the investment? The firm Select make the investment.

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

Problem 1PS

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Strange Manufacturing Company is purchasing a production facility at a cost of $12 million. The company expects the project to generate annual cash flows of $6.4 million over the next 5 years. Its cost of capital is 6.7 per cent. What is the net present value of this project? Round your answer to 2 decimal places. E.g. if the final value is $12345.8342, please type 12345.83 in the answer box (do not type the dollar sign).
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Please do not provide solution in image format and give proper explanation.
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