New branch as result of favorable business

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Reference no: EM131554700

NWA inc hopes to start a new branch as a result of favorable business. The project will provide a net cashflow of $85,200 for the firm during the first year and the cash flows are projected to grow at a rate of 4.5% per year forever. The project requires an intial investment of 1,750,000. If NWA requires 12% return on such undertakings, should the business be started?

Reference no: EM131554700

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