XYZ is considering a 3-yr project. The initial outlay is -$120,000, annual cash flow is $50,000 and the terminal cash flow is $10,000. The required rate of return (cost of capital) is 15%. The net present value is $736.42. What if the annual cash flow increases to $56,000 instead? Re-calculate the NPV.

Answer rating: 100% (QA)

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