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Q1 A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years. What is the NPV of a project that has cash flows of 50,000, 80,000, 100,000 and 150,000 for the first to fourth year respectively. The capital injection is 350,000. All figures are in Ringgit Malaysia (RM).

Q1 A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years. What is the NPV of a project that has cash flows of 50,000, 80,000, 100,000 and 150,000 for the first to fourth year respectively. The capital injection is 350,000. All figures are in Ringgit Malaysia (RM).

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Q1 A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years. What is the NPV of a project that has cash flows of 50,000, 80,000, 100,000 and 150,000 for the first to fourth year respectively. The capital injection is 350,000. All figures are in Ringgit Malaysia (RM).
Transcribed Image Text:Q1 A project manager is using the net present value method to make the final decision on which project to undertake. The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years. What is the NPV of a project that has cash flows of 50,000, 80,000, 100,000 and 150,000 for the first to fourth year respectively. The capital injection is 350,000. All figures are in Ringgit Malaysia (RM).
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