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Accounting

Problem:

A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1, $195,000 in year 2, and $330,000 in year 3. The discount rate is 12%.

Required:

Question 1: Calculate the PV of cash inflows.

Question 2: Is the factory a good investment?

Note: Show all workings.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171995

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