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1) What concept must be considered when looking at cash flows over several years for a long-term investment? Explain

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1) What concept must be considered when looking at cash flows over several years for a long-term investment? Explain.

2) What is meant by the term present value?

3. What is the formula used to calculate the present value of a future cash flow? Describe each component.

4. Describe the three steps required to evaluate investments using the net present value method.