Question: Problem 12-14 Net present value method [LO12-4) Aerospace Dynamics will invest $145,000 in a project that will produce the following cash flows. The cost of

 Problem 12-14 Net present value method [LO12-4) Aerospace Dynamics will invest

Problem 12-14 Net present value method [LO12-4) Aerospace Dynamics will invest $145,000 in a project that will produce the following cash flows. The cost of capital is 9 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 $ 40,000 2 55,000 3 60,000 4 (47,000) 5 130,000 a. What is the net present value of the project? (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? O Yes O No

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