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(a)
Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.
Net present value method is the method which is used to compare the initial
To determine: The net present value based on the original estimates.
(b)
Net present value method:
Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.
To determine: The net present value based on the revised estimates.
(c)
Net present value method:
Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.
To determine: The net present value based on the original estimates with 9% of discount rate.
(d)
To discuss: Whether the proposal is accepted or not.
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Chapter 12 Solutions
Managerial Accounting: Tools For Business Decision Making, Seventh Edition Wileyplus Card
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Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning