Question

10. Calculate the NPV of a project with initial capital outlay of ₡80,000 that will provide ₡25,000 annual cash inflows indefinitely. The required rate of return is 20%.

Answer #1

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PROJECT A
PROJECT B
Initial Outlay
minus−$5000050,000minus
−$7000070,000
Inflow year 1
1200012,000
1300013,000
Inflow year 2
1200012,000
1300013,000
Inflow year 3
1200012,000
1300013,000
Inflow year 4
1200012,000
1300013,000
Inflow year 5
12 00012,000
1300013,000
Inflow year 6
12 00012,000
1300013,000
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