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August 29, 2015

Homework Help: Accounting

Posted by Kathy on Thursday, September 16, 2010 at 7:43pm.

The proposed 'asset' investment for a new restaurant is $2,000,000. The restaurant is expected to generate cash inflows of $300,000 during its 'project' life of ten (10) years. The Weighted Cost of Capital is 10%. What is the Present Value of a 'cash' investment that would generate $300,000 annually, discounted (required rate of return) at 10%?

(b) $300,000 annually, discounted at 8%?

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