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A Capacity Alternative Has an Initial Cost of $50,000 and Cash

Question 61

Multiple Choice

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years. If the cost of capital is 5 percent, the net present value of this investment is approximately


A) $20,920
B) $26,160
C) $49,840
D) $70,920
E) $106,990

Correct Answer:

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