You are considering starting a painting company that costs $1,250 upfront. It has revenues of 2,000 in year 1, 3,000 in year 2, 4,000 in year 3 and 5,000 in year 4. The costs each year are 55% of the revenues. In year 5, you plan to close it down and you will need to spend $5,000 to clean up the paint. If the interest rate is 12% annually. What is the NPV of this project?

Answer rating: 100% (QA)

SOLUTION FORMULA NPV Initial Cost Year 1 Revenues x 1 Costs 1 Discount ... View the full answer