$40,000 per year for six years. The required return is 12%.
a. What is the NPV using Bill’s estimates?
b. David Scott is less optimistic about the project. David thinks the outlay will be 10%
higher, the annual cash flows will be 5% lower, and the project will have a five-year
life. David does agree with Bill’s required return. What is the NPV using David’s
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