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Engineering, 24.04.2020 18:46 aons

South Park Gum Corp. is considering investing in a new chewing gum manufacturing plant. The plant will cost $10,000 to set up and will support production for two years. Managers project that net cash flow in year 1 will be $5,000, and the net cash flow in year 2 will be $7,000. Which of the following models would be most appropriate for evaluating the proposed project? NPV =-10,000 + 5,000(1 + r)^1 + 7,000(1 + r)^2 where r is the discount rate for this project. NPV= -10,000 + 5,000 1-(1+r)^-2/r where r is the discount rate for this project. NPV = 5,000/1+r + 7,000/(1+r)^2 where r is the discount rate for this project. NPV = -10,000 + 5000/1+r + 7,000/(1+r)^2 where r is the discount rate for this project.

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South Park Gum Corp. is considering investing in a new chewing gum manufacturing plant. The plant wi...
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