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What is the net present value assuming no tax effects

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Reference no: EM132616661

Bella's Ltd is considering the following investment project.

Initial cost                                        $ 450,000

Salvage value                                           $0

Useful life                                             8 Years

Real annual net cash flow                       $100,000

Nominal discount rate                           20% p.a.

Expected inflation rate                            8% p.a.

Problem 1: What is the net present value (NPV) of the project, assuming no tax effects or depreciation? Note: Interest rates should be rounded to two decimal places.

Option 1) $62 600

Option 2) $66 284

Option 3) $124 664

Option 4) $350 000

Reference no: EM132616661

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