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Question(s) / Instruction(s):

The Harrison Corporation has analyzed an investment opportunity costing $150,000 and determined that the net present value is $8,705. Harrison’s management estimated that the investment would have equal annual net cash flows for twelve years, a salvage value of $15,000 after twelve years, and used a discount rate of 12%. What was the annual net cash flow associated with the investment opportunity?

Note: Present value tables are needed.

A.            $25,000

B.            $25,600

C.            $20,390

D.            $23,200

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