Unformatted text preview: CF = 22500, CF 1 = 6250, N j = 2, CF 3 = 17250, and I = 10 to solve for NPV 3 = $1,307.29 ≈ $1,307. Using a financial calculator, input the following: CF = 22500, CF 1 = 6250, N j = 3, CF 4 = 11250, and I = 10 to solve for NPV 4 = $726.73 ≈ $727. Using a financial calculator, input the following: CF = 22500, CF 1 = 6250, N j = 5, and I = 10 to solve for NPV 5 = $1,192.42 ≈ $1,192. The firm should operate the truck for 3 years, NPV 3 = $1,307. b. No. Salvage possibilities could only raise NPV and IRR. The value of the firm is maximized by terminating the project after Year 3....
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 Spring '08
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