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- A business is considering an investment alternative that has the following projected information:
Upfront investment cost $1,200,000
Life of investment 10 years
Minimum required rate of return 12%
Annual incremental cash flows:
Cash revenue $1,700,000
Cash expenses $1,460,000
- Determine the annual net cash flow of the investment.
Is the answer 1,700,000 - 1,460,000 = 240,000
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