1) A small company purchased now for $23,000will lose $1,200 each year for the first four years.An additional $8,000 is invested in the companyduring the fourth year will result in a profit of$5,500 each year from the fifth through to fifteenyear. At the end of 15 year the company can besold for $33,000. The desired rate of return is 15%.A) Calculate the NPV of the project.*

here we calculate the NPV value of the project which are as follow-

Answered: will lose $1,200 each year for the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Are the following cash flow diagrams economically equivalent if the interest rate is 15% per year? 0 7M 1 8M 2 ΕΟΥ 6M 3 5M 4 H 0 7M 1 7M 2 ΕΟΥ The left-hand diagram's discounted value at the EOY 0 is $[ M. (Round to three decimal places.) 7M 3 7M 4
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