Question: Connors Music is considering investing 650 000 in private lesson

Connors Music is considering investing $ 650,000 in private lesson studios that will have no residual value. The studios are expected to result in annual net cash inflows of $ 90,000 per year for the next ten years. Assuming that Connors Music uses an 12% hurdle rate, what is net present value (NPV) of the studio investment? Is this a favorable investment?

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  • CreatedAugust 27, 2014
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