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# A proposed project requires an initial cash outlay of \$388,699 for equipment and an additional cash...

A proposed project requires an initial cash outlay of \$388,699 for equipment and an additional cash outlay of \$51,864 in year 1 to cover operating costs. During years 2 through 4, the project will generate cash inflows of \$500,000 a year. What is the net present value of this project at a discount rate of 9 percent? Round your answer to the nearest whole dollar.

 Year Project Cash Flows (i) [email protected] 9% (ii) PV of Project ( (i) * (ii) ) 0 -388699 1 1 (3,88,699.00) 1 -51864 1/((1+9%)^1) 0.917431 (47,581.65) 2 500000 1/((1+9%)^2) 0.841680 4,20,840.00 3 500000 1/((1+9%)^3) 0.772183 3,86,091.74 4 500000 1/((1+9%)^3) 0.708425 3,54,212.61 NPV 7,24,863.69 NPV of Project B is 724864

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