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A Project Costs $200,000, Produces Annual Cash Inflows of $20,000

Question 69

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A project costs $200,000, produces annual cash inflows of $20,000, and has a discount rate of 8%. Explain how you can quickly determine the difference in the NPV of the project if the cash inflows last only 30 years rather than 40 years. Show the calculations needed to determine the amount of the NPV difference.

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The difference must equal the ...

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