Based on projected sales and costs relative to a new potential business investment, we expect that the cash flow over the five-year life of the investment will be $2,000 in the first two years, $4,000 in the next two years, and $5,000 in the last year. It will cost about $10,000 to begin production. We use a 10% discount rate to evaluate new projects. Based on NPV, should we take on the project? Show the formula, do the math, indicate units of measurement, and explain very briefly.

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To determine whether we should take on the project based on Net Present Value NPV we calculate the p... View the full answer