Firm has undertaken feasibility study to evaluate project

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A firm has undertaken a feasibility study to evaluate a project that has the following estimated cashflows:

Increased sales to business of $160,000 for the next four years (starting in one year's time)

Increased costs of $40,000 for the next two years (starting in one year's time)

The initial capital expenditure required is $400,000.

The feasibility study cost $8,000 to conduct.

Amount borrowed to fund project is $280,000 with interest of 7.5% p.a. paid yearly.

If the firm is facing a discount rate of 10%, what is the NPV of this project?

Reference no: EM131554748

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