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You are considering a two-year project with a present value of revenues of $4 million. The...

You are considering a two-year project with a present value of revenues of $4 million. The project has a present value of operating costs of $2.5 million and requires an initial capital expenditure of $550,000, which can be depreciated in a straight line over three years. However, you expect to sell this asset after two years for $400,000. Finally, the project requires a $400,000 working capital investment incurred immediately and recovered at the end of the second year. What is the project’s NPV if your tax rate is 25% and the opportunity cost of capital is 8%?

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