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Wandering RV is evaluating a capital budgeting project that is expected to generate $36,950 per year during its six-year life. If its required rate of return is 10 percent, what is the value of the project to Wandering RV?

1 Answer

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Answer:

the value of the project is $16,096.88

Step-by-step explanation:

The computation of the value of the project is shown below:

= (Expected amount generated per year × (1 - (1 ++ rate of returm)^-time period )) ÷ rate of return

= $36,950 × [1 - 1.1^-6] ÷ 0.1

= $16,0926.88

Hence, the value of the project is $16,096.88

We simply applied the above formula so that the correct value could come

And, the same is to be considered

User Hanzworld
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