A project's estimated cash flows are summarized below: 

Year                         Cash Flow 

0                                 −? 

1                                   $500 

2                                    $400 

3                                  $600 

4                                   $300 

The project has a payback of 2.6 years. What is the project's net present value (NPV) if the cost of capital of the project is 10%? (Hint: You need to find the cash flow at Year 0 before you calculate NPV.)

Answer rating: 100% (QA)

To calculate the net present value NPV of the project we need to first find the cash flo... View the full answer