Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as follows:
Question:
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%.
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
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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