What is the net present value

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Reference no: EM131925019

Iceland Inc. is considering a project with an initial cost of $1 million.

The project will not produce any cash flows for the first two years. Starting in year 3, the project will produce cash inflows of $625,000 a year for four years.

This project is risky, so the firm has assigned it a discount rate of 22 percent. What is the net present value?

Reference no: EM131925019

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