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A project with an initial outlay of $5164 has a required rate of return of 7.49%...

A project with an initial outlay of $5164 has a required rate of return of 7.49% and NPV of $801. Given the cash flows in the table below, find the cash flow in Year 2, to the nearest dollar.

Year Cash Flow

1 $1153

2   CF2 = ???

3 $1571

4 $2039

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Answer #1

Given,

Initial outlay = $5164

Required return (r) = 7.49% or 0.0749

NPV = $801

Year 1 cash flow (CF1) = $1153

Year 2 cash flow (CF2) = $X

Year 3 cash flow (CF3) = $1571

Year 4 cash flow (CF4) = $2039

Solution :-

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