Norton Company Is Considering a Project That Will Require an Initial

question 150

Essay

Norton Company is considering a project that will require an initial investment of $750,000 and will return $200,000 each year for 5- years.
(a)If taxes are ignored and the required rate of return is 9%,what is the project's net present value?
(b)Based on this analysis,should Norton Company proceed with the project?
Below is a table for the present value of $1 at compound interest.
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Below is a table for the present value of an annuity of $1 at compound interest.
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