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A proposed capital project requires an investment of $20 million and $5 million in working capital. The project will generate $7 million annually in pre?tax cash flows for 10 years. The equipment can be sold for $2 million at the end of the project. The cost of capital for a project of this risk level is 12.2%. Should the project be accepted? Why or why not?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92880866

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