Financial statements analysis
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Case Study: Gamma Gamma is a company engaged in the development of smart water purification systems. Its product development division has recently introduced
Market Projections To bring • Initial Investment: Gamma must make an investment of $2 300 000 at the start of the project. • Expected Operating Profits: o By the end of the first year, the company anticipates earning $850 000 in operating profit. o By the end of the second year, operating profit is projected at $750 000. o By the end of the third year, the expected operating profit is $650 000. • Discount Rate: 10%
============== Instructions ======================
Round all numerical answers to 2 decimal places.
Use + for cash inflows and – for cash outflows. Do not add spaces before, after, or within the numbers you enter.
============= Questions ============================ What is the present value of cash flow at the beginning of the project (Year 0)? What is the present value of cash flow at the end of Year 1? What is the present value of cash flow at the end of Year 2? What is the present value of cash flow at the end of Year 3? What is the net present value of the project?
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