Question: ABC Medical centre is studying a project that would have an eight-year life and require a $1,600,000 investment in equipment. At the end of six

ABC Medical centre is studying a project that would have an eight-year life and require a $1,600,000 investment in equipment. At the end of six years, the project would terminate and the equipment would have no residue value. The project would provide net cash-in each year $500,000. The interest rate is 16%.

Required:

1. Compute the present value of net annual cash inflow from the project

2. Is the project acceptable?


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