Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as follows:

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Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as follows:

---- Net Cash Flows ----

Project Alpha

Initial Cost at T-0 (Now) ........ $(10,000)

Cash inflow at the end of year 1 ...... $6,000

Cash inflow at the end of year 2 ...... $4,000

Cash inflow at the end of year 3 ...... $2,000


Calculate project Alpha's Net Present Value (NPV), assuming your firm’s required rate of return is 10%.


Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...
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Related Book For  book-img-for-question

Financial Reporting and Analysis

ISBN: 978-0078025679

6th edition

Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon

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