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Question (Category: Business Accounting )
FI515 (TCO H) Sub-Prime Loan Company is thinking of opening a new office FI515 Financial Management Week 6 (TCO H) Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below.The company owns the building that would be used, and it could sell it for $100,000 after taxes, if it decides not to open the new office.The equipment for the project would be depreciated by the straight-line method over the projectrsquos three-year life, after which it would be worth nothing, and thus it would have a zero salvage value.No new working capital would be required, and revenues and other operating costs would be constant over the projectrsquos three-year life. What is the projectrsquos NPV? (Hint Cash flows are constant in years 1-3.)


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