As the owner of a business, you must make an investment decision. The investment will expand your

Question:

As the owner of a business, you must make an investment decision. The investment will expand your company's production plant at a cost of $1 million. The expansion will generate income of $150,000 per year for 10 years; the required rate of return on the investment is 9 percent. What is the net present value NPV of the investment, and should you proceed with the expansion?

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...