Net present value of the proposed investment

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Widget Ltd is evaluating the purchase of new manufacturing equipment that costs $200,000. The acquisition is expected to generate net operating cash flows of $0 in year one, $80,000 in year two, $90,000 in year three and $100,000 in year four. Assuming a cost of capital of 14%, the net present value of the proposed investment is:

Select one:

a. -$18,487.

b. $6,925.

c. $7,870.

d. $10,969.

e. $40,505.

Reference no: EM133068002

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