We have property that is projected to generate cash flows of $100,000 over this first year...

We have property that is projected to generate cash flows of $100,000 over this first year of operations. Our projected growth rate in those flows is constant at 5% over the 5 year holding period. What is the NPV of those cash flows discounted at 12%? Initial outlay is $300,000.

Net present value of investment

Expert Solution

Net present value of the project= $94,005.09 as follows:

jeff jeffy answered 2 years ago

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