NPV$.$ Calculate the net present value $($NPV$)$ for the following $15-$year projects. Comment on the acceptability of each. Assume that the firm

has a cost of capital of $9\%.$

a$.$ Initial investment is $$1,000,000$; cash inflows are $$150,000$ per year.

b$.$ Initial investment is $$2,500,000$; cash inflows are $$320,000$ per year.

c$.$ Initial investment is $$3,000,000$; cash inflows are $$365,000$ per year.

Solution

a$.$ Initial investment is $$1,000,000$; cash inflows are $$150,000$ per year.

b$.$

c$.$