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Author Question: What is the NPV for a project whose cost of capital is 15 percent and initial after-tax cost is ... (Read 62 times)

abern

  • Hero Member
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  • Posts: 533
on: Jul 10, 2018
What is the NPV for a project whose cost of capital is 15 percent and initial after-tax cost is 5,000,000 and is expected to provide after-tax operating cash inflows of 1,800,000 in year 1, 1,900,000 in year 2, 1,700,000 in year 3, and 1,300,000
 
  in year 4?
  A) 1,700,000
  B) 371,764
  C) -137,053
  D) -4,862,947

Question 2

For tax purposes, using MACRS recovery periods, assets in the first four property classes are depreciated by the double-declining balance method using the half-year convention and switching to straight line when advantageous.
 
  Indicate whether the statement is true or false


Perkypinki

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Reply #1 on: Jul 10, 2018
Answer to Question 1

C

Answer to Question 2

TRUE


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