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Following Details Are Provided by VPN Company Refer to the Following Table for PV Factors

Question 17

Multiple Choice

Following details are provided by VPN Company.
 Initial investment $5,000,000 Discount rate 15% Yearly cash flows 1$1,268,0002$1,358,0003$2,416,0004$1,170,000\begin{array} { | c | c | } \hline \text { Initial investment } & \$ 5,000,000 \\\hline \text { Discount rate } & 15 \% \\\hline \text { Yearly cash flows } & \\\hline 1 & \$ 1,268,000 \\\hline 2 & \$ 1,358,000 \\\hline 3 & \$ 2,416,000 \\\hline 4 & \$ 1,170,000 \\\hline\end{array}
Refer to the following table for PV factors:
13%14%15%10.8850.8770.8720.7830.7690.75630.6930.6750.65840.6130.5920.572\begin{array} { | c | c | c | c | } \hline & 13 \% & 14 \% & 15 \% \\\hline 1 & 0.885 & 0.877 & 0.87 \\\hline 2 & 0.783 & 0.769 & 0.756 \\\hline 3 & 0.693 & 0.675 & 0.658 \\\hline 4 & 0.613 & 0.592 & 0.572 \\\hline\end{array}
What is the NPV of the project?


A) $590,000 positive
B) $596,759 negative
C) $611,224 negative
D) $624,318 positive

Correct Answer:

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