Problem $12-14($Algo$)$ Net present value method $[$LO$12-4]$

Aerospace Dynamics will invest $$200,000$ in a project that will produce the following cash flows. The cost

of capital is $11$ percent. $($Note that the fourth year's cash flow is negative.$)$ Use Appendix B for an

approximate answer but calculate your final answer using the formula and financial calculator methods.

a$.$ What is the net present value of the project?

Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations

and round your answer to $2$ decimal places.

Net present value

b$.$ Should the project be undertaken?

yes

noProblem $12-14($Algo$)$ Net present value method $[$LO$12-4]$

Aerospace Dynamics will invest $$200,000$ in a project that will produce the following cash flows. The cost of capital is $11$ percent. $($Note that the fourth year$$s cash flow is negative.$)$ Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Year Cash Flow

$1$ $ $65,000$

$280,000$

$369,000$

$4(80,000)$

$5147,000$

What is the net present value of the project?

Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to $2$ decimal places.

Should the project be undertaken?

multiple choice

yes