An initial investment of $12,000 on an Artificial Intelligence (AI) powered cyber defense project is expected to generate cash inflows of $4,000, $4,000, $3,000, $4000 and $7,000 at the end of first, second, third, fourth and fifth year respectively for TTC firm. That firm expects to sell an initial version of the software for $5,000 at the end of 2nd year. An advanced version of that software is expected to be sold for $5,000 at the end of 4th year. At the end of the fourth year, the GPU machines used for the development will be sold for $3000. Calculate the net present value of the investment if the discount rate is 10\

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
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An initial investment of $12,000 on an Artificial Intelligence (AI) powered cyber defense project is expected to generate cash inflows of $4,000, $4,000, $3,000, $4000 and $7,000 at the end of first, second, third, fourth and fifth year respectively for TTC firm. That firm expects to sell an initial version of the software for $5,000 at the end of 2nd year. An advanced version of that software is expected to be sold for $5,000 at the end of 4th year. At the end of the fourth year, the GPU machines used for the development will be sold for $3000. Calculate the net present value of the investment if the discount rate is 10\% . 

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