An investment of $100 generates aft er-tax cash flows of $40 in Year 1, $80 in Year

Question:

An investment of $100 generates aft er-tax cash flows of $40 in Year 1, $80 in Year 2, and $120 in Year 3. The required rate of return is 20 percent. The net present value is closest to

a. $42.22

b. $58.33

c. $68.52

d. $98.95

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...