You are evaluating a new project. The project has revenues of $100k per year,  and operating costs of $40k per year, both paid at the end of the year. There are  no taxes. The project also requires an initial inventory of $500k. Each year,  inventory will increase by $100k. 

The project will be in operation for 10 years  before shutting down. If the firm's discount rate is 6%, what is the NPV of the  project?

Answer rating: 100% (QA)

SOLUTION To calculate the NPV of the project we need to discount the cash inflows and outflows to their present value using the firms discount rate of ... View the full answer