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Question(s) / Instruction(s):

ABC Cameras is considering an investment that will have a cost of $10,000 and the following cash flows: $6,000 in year 1, $4,000 in year 2 and $3,000 in year 3. Assume the cost of capital is 10%. Which of the following is true regarding this investment?

a)      The net present value of the project is approximately $10,000

b)      This project should be accepted because it has a positive net present value

c)       This project’s payback period is 10 years or more

d)      None of the above is true

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