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Question(s) / Instruction(s):

The Wilbury Company has analyzed an investment opportunity and determined that the net present value is -$19,625. Wilbury’s management estimated that the investment would generate cash inflows of $75,000 a year for five years. What was the initial cost of the investment, assuming that Wilbury utilized a 12% discount rate?

Note: Present value tables are needed.

A.            $290,000

B.            $250,750

C.            $270,375

D.            $309,625

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