You are considering investing in a venture to build a new "app" for Apple handheld devices.  You are going to have to buy equipment which you believe will cost roughly $2,000.  You expect the app will generate the following cash flows.  

 

If you expect an appropriate discount rate to be 8%, what is this project's NPV?

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Purch. Equip. I (2,000) This is negative Yr 1 1 100 Yr 2 T 2,000 XC 3 (2,000) This is negative 4400 Yr 5 2,000 Purch. Equip. I (2,000) This is negative Yr 1 1 100 Yr 2 T 2,000 XC 3 (2,000) This is negative 4400 Yr 5 2,000

Answer rating: 100% (QA)

Answer Ans Reject the project since NPV is negative Y... View the full answer