XYZ Company is considering purchasing new equipment costing SAR 250,000. The company’s management has estimated that the equipment will generate cash flows as follows (SAR):

Year	Net Cash Flow	PV @10%
1	90,000	0.9091
2	75,000	0.8264
3	85,000	0.7513
4	75,000	0.6830

The company's required rate of return is 10%. 

Calculate the net present value and give reasons on whether the project should be accepted or rejected.

Answer rating: 100% (QA)

To calculate the net present value NPV of the project we need to discount the cash flows back to the ... View the full answer