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Question: Aerospace Dynamics will invest $135,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Note that the fourth year's cash flow is negative.) Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Year Cash Flow

1 $46,000

2 54,000

3 68,000

4 (53,000)

5 120,000

a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)

b. Should the project be undertaken?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92771510

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