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An investment that costs $50,000 will return $15,000 operating cash flows per year for five years. Determine the net present value of the investment if the required rate of return is 14 percent. Should the investment be undertaken?

-Yes, the profit is $25,000.

-No, the accounting return is less than 14%.

-No, the net present value is negative at $11,045.

-Yes, the net present value is positive at $1,496. 50.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91881744

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