Calculate the original and revised net present value

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Martelle Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $274,000, would have a useful life of nine years and zero salvage value, and would result in net annual cash flows of $46,200 per year. Now that the investment has been in operation for one year, revised figures indicate that it actually cost $283,000, will have a useful life of 11 years, and will produce net annual cash flows of $38,900 per year. Assume a discount rate of 8%. Click here to view PV table.

Problem 1: Calculate the original and revised net present value.

Problem 2: Does the project turn out as successful as predicted?

Reference no: EM132960780

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