A company wants to launch a new drink product. The new product has an initial cost of $200,000. The company requires a 4% rate of return for 5 years.
The company is projecting cash flows as follows:
Year 1 $25,000
Year 2 $35,000
Year 3 $40,000
Year 4 $50,000
Year 5 $55,000

 

1.Compute the Net Present Value of the project?

2.Should the firm go forward with this project?

Answer rating: 100% (QA)

To compute the Net Present Value NPV of the project we need to discount the projected cash flows to ... View the full answer