Suppose an investment with an initial cost of $10,000 is estimated to produce after-tax cash flows of $3,000 per year for 8 years.How low can the annual after-tax cash flows be before the NPV of the investment equals zero? Assume that the appropriate discount rate is 8 percent.
A) $1,250
B) $1,260
C) $1,740
D) $2,262
Correct Answer:
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