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Calculate the net present value of the project

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Question

The Montana Company has decided to invest in a project that is expected to produce the following cash flows: $12,500 (year 1), $14,000 (year 2) and $9,000 (year 3). The project would require a $28,000 initial investment and has a salvage value of $2,000 and the end of year 3.

Required: Calculate the net present value (NPV) of the project assuming an interest rate of 8 percent; show your work.

Reference no: EM132323849

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