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compute the NPV for project M if the appropriate cost of capital is 7%. Time: 0...

compute the NPV for project M if the appropriate cost of capital is 7%.

Time: 0 1    2 3    4    5

Cashflow:    -$3,400 $730    $860 $900    $980    $480

Should the project be accepted or rejected?

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Answer #1
Year Cash flow PVIF@7% Present value
0 $     (3,400) 1.00000 -$3,400.00
1 $          730 0.93458 $682.24
2 $          860 0.87344 $751.16
3 $          900 0.81630 $734.67
4 $          980 0.76290 $747.64
5 $          480 0.71299 $342.23
Net present value -$142.06

Reject the project

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