Problem 4

Net present value Using a cost of capital of 14% calculate the net present value for the project shown in the following table and indicate whether it is acceptable.

Initial Investment 390,000

Year cash inflow

1 $80,000

2 $80,000

3 $80,000

4 $80,000

5 $80,000

6 $80,000

7 $80,000

8 $80,000

9 $80,000

10 $80,000

The net present value (NPV) of the project is $________

Is the project acceptable? Yes or No