Sports & Moreis considering the development of an e-commerce business. The company estimates that development will require an initial outlay of $350,000. Other cash flows are estimated as follows:

Year 1: ($60,000) 

Year 2: $140,000

Year 3: $210,000 

Year 4: $130,000 

Assuming the company limits its analysis to four years due to economic uncertainties, determine the net present value of the e-commerce business. Should the company develop the e-commerce business if the required rate of return is 6 percent?

Answer rating: 100% (QA)

To determine the net present value NPV of the ecommerce business we need to discount ... View the full answer