Should the investment be undertaken

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Reference no: EM13809642

The Horizon Company will invest $60,000 in a temporary project that will generate the following cash inflows for the next three years.

Year Cash Inflow

1 $15,000

2 25,000

3 40,000

The firm will also be required to spend $10,000 to close down the project at the end of the three years. If the cost of capital is 10 percent, should the investment be undertaken?

Reference no: EM13809642

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