Question: Suppose a certain property is expected to produce net operating cash flows annually, as follows, at the end of each of the next five years:

Suppose a certain property is expected to produce net operating cash flows annually, as follows, at the end of each of the next five years:

Year 1 = $50,000

Year 2 = $45,000

Year 3 = $50,000

Year 4 = $55,000

Year 5 = $65,000

In addition, at the end of the fifth year we will assume the property will (or at least could) be sold for $650,000. If the required rate of return on projects of similar risk is 14%, and you plan to invest $425,000 in the property:

What is the net present value (NPV) of this investment project? PLEASE EXPLAIN HOW TO SOLVE ON FINANCIAL CALCULATOR

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