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19 The project analyst of Carbon Company is considering the purchase of a new computer mainframe for P5 million. The analysis reveals that the new mainframe should bring in additional after-tax cash flows of P850,000, measured in real pesos during the next ten years.  The real interest rate is 10% and the inflation rate is 5% or a nominal rate of 15.50%  Using nominal cash flows (i.e., annual cash flows cumulatively increased by 5% every year) and nominal rate of 15.50%, how much net present value is expected from the project?  Group of answer choices  P166,552  P151,878  P182,406  P222,882

19 The project analyst of Carbon Company is considering the purchase of a new computer mainframe for P5 million. The analysis reveals that the new mainframe should bring in additional after-tax cash flows of P850,000, measured in real pesos during the next ten years.  The real interest rate is 10% and the inflation rate is 5% or a nominal rate of 15.50%  Using nominal cash flows (i.e., annual cash flows cumulatively increased by 5% every year) and nominal rate of 15.50%, how much net present value is expected from the project?  Group of answer choices  P166,552  P151,878  P182,406  P222,882

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...
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19

The project analyst of Carbon Company is considering the purchase of a new computer mainframe for P5 million. The analysis reveals that the new mainframe should bring in additional after-tax cash flows of P850,000, measured in real pesos during the next ten years. 

The real interest rate is 10% and the inflation rate is 5% or a nominal rate of 15.50% 

Using nominal cash flows (i.e., annual cash flows cumulatively increased by 5% every year) and nominal rate of 15.50%, how much net present value is expected from the project? 

Group of answer choices 

P166,552 

P151,878 

P182,406 

P222,882 

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