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Heap Corporation is considering an investment in a project that will have a two year life. The project will provide a 10% internal rate of return, and is expected to have a $40,000 cash inflow the first year and a $50,000 cash inflow in the second year. What investment is required in the project?

Respuesta :

cecylya

Answer:

The Investment required is 77686

Explanation:

The required investment is the actual amount of the 2 inflows that we will receive in the future

Investment (Present Value) =∑A/ (1+r)ⁿ

A=cash inflows

r= internal rate of return

n= time

Investment=∑A/ (1+r)ⁿ

Investment= $40,000 /(1+0,10)¹ +$50,000 /(1+0,10)²

Investment=36364+41322

Investment=77686

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