A project requires a $42,000 initial investment and is expected to generate end-of-period annual cash inflows as
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Question:
A project requires a $42,000 initial investment and is expected to generate end-of-period annual cash inflows as follows:
| Year 1 | Year 2 | Year 3 |
|---|---|---|
| $ 19,000 | $ 20,000 | $ 19,000 |
Assuming a discount rate of 14%, what is the net present value of this investment?
Selected present value factors for a single sum are shown in the table below.
| i = 14% | i = 14% | i = 14% |
| n = 1 | n = 2 | n = 3 |
| 0.8772 | 0.7695 | 0.6750 |
Expert Answer:
To calculate the net present value NPV of the investment we need to discount each cash inflow to its ... View the full answer
Related Book For 
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
