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What is the npv and should start making widgets

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Reference no: EM132542711

Question 1: If your company starts making widgets, they'll have to invest $5 million today. You expect you'll make $550,000 per year for 40 years start a year from today. Unfortunately, 3 years from today you'll have to pay out $1 million to settle lawsuits that the widgets aren't 100% safe. If your company has a discount rate of 10%, what is the NPV and should you start making widgets?

Reference no: EM132542711

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