Question: Testco Corporation is considering adding a new product line. The cost of the factory and equipment to produce this product is $1,780,000. Company management expects

Testco Corporation is considering adding a new product line. The cost of the factory and equipment to produce this product is $1,780,000. Company management expects net cash flows from the sale of this product to be $450,000 in each of the next eight years. If Testco uses a discount rate of 12 percent for projects like this, what is the net present value of this project? What is the internal rate of return?

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Investment 1780000 Annual net cash flow NCF 450000 Discount rate k 12 Length of project n 8 ye... View full answer

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