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The NewProduct Project Involves an Initial Investment of £400,000

Question 23

Multiple Choice

The NewProduct project involves an initial investment of £400,000. The predicted annual cash flow is £150,000 for a four year period, after which the product will be replaced. The required rate of return is 15 per cent. What is the net present value?


A) - £25,750
B) £200,000
C) £35,750
D) £28,250

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