Assume an industrial building can be purchased for $1,500,000 today, is expected to yield cash flows of $80,000 for each of the next five years (with the cash flows occurring at the end of each year), and can be sold at the end of the fifth year for $1,625,000. 

Assuming that the required rate of return is 10%, calculate the NPV for this transaction.

Answer rating: 100% (QA)

To calculate the Net Present Value NPV for this transaction we need to discount the expected cash fl... View the full answer