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How to compute the net present value of the investment

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Reference no: EM132716617

Problem 1: How to Compute the net present value of the investment and determine if the project is worthwhile. The company is considering investing in new equipment to produce healthy foods.

The investment information for the company is as follows:

Initial investment $1,000,000

Cost of equipment overhaul in 5 years $200,000

Salvage value of equipment in 10 years $20,000

Cost of capital 15%

The net annual cash flow of this project $230,000

Reference no: EM132716617

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