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zar zar
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5 years ago
Use the information for the question(s) below.




The owner of a hair salon spends $1,000,000 to renovate its premises, estimating that this will increase her cash flow by $220,000 per year.  She constructs the above graph, which shows the net present value (NPV) as a function of the discount rate. At what dollar value should the NPV profile cross the vertical axis?

▸ The vertical axis crossing point cannot be calculated since the cash inflows are a perpetuity.

▸ $1,000,000

▸ Cannot be determined because inadequate information is given.

▸ $780,000
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
Authors:
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kwashington67kwashington67
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5 years ago
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zar Author
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5 years ago
Thank you, thank you, thank you!
Smair87
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this is exactly what I needed
julymontalvo
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This calls for a celebration Person Raising Both Hands in Celebration
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