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2. Analyze the following scenario: Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,200,000 if purchased today and will generate the following cash disbursements and receipts. Should Duncombe pursue the investment if the cost of capital is 8 percent? Why? Clearly label your calculations in your analysis. You must respond to at least two of your classmates’ postings to receive full credit.

Year


Cash Receipts


Cash Disbursements


Net Cash Flow

1


1,000,000


500,000


500,000

2


925,000


475,000


450,000

3


800,000


450,000


350,000

4


750,000


430,000


320,000

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