Is the a good investment using the net present value

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Reference no: EM132595662

Capital Budgeting Decisions Chee Company has gathered the following data on a proposed investment project:

Investment required in equipment............. $240,000

Annual cash inflows.................................. $50,000

Salvage value ............................................ $0

Life of the investment ............................... 8 years

Required rate of return .............................. 10%

Assets will be depreciated using straight-line depreciation method

Required:

Question 1: Using the net present value and the internal rate of return methods, is this a good investment?

Reference no: EM132595662

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