Computing net present value Purity Products is considering a project that requires an initial investment of $2,000,000 and that will generate the following cash inflows for the next 5 years Calculate the net present value of this project if Purity 's cost of capital is a 12 percent b 20 percent 600,000 Year 1 2 3 4 Cash Inflow at End of Year $300,000 400,000 800,000 800,000 50

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Question: Computing net present value. Purity Products is considering a project that requires an initial investment of $2,000,000 and that will generate the following cash inflows

Computing net present value. Purity Products is considering a project that requires an initial investment of $2,000,000 and that will generate the following cash inflows for the next 5 years: 600,000 Year 1 2 3 4 Cash Inflow at End of Year

Calculate the net present value of this project if Purity's cost of capital is

a. 12 percent.

b. 20 percent.

600,000 Year 1 2 3 4 Cash Inflow at End of Year $300,000 400,000 800,000 800,000 50

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