Question

Using a cost of capital of 15​%, calculate the net present value for the project shown in the following table and indicate whether it is​ acceptable

Initial investment   $-1,145
Year   Cash inflows
1   $76
2   $132
3   $185
4   $256
5   $316
6   $383
7   $277
8   $98
9   $43
10   $25

The net present value​ (NPV) of the project is $_____

Please show all work and what inputs would be in a financial calculator

Answer 1

Calculation of Net Present Value:
Year	Cash flow	Discount factor	Present value
a	b	c=1.15^-a	d=b*c
0	$       -1,145	1.000	$ -1,145.00
1	$               76	0.870	$         66.09
2	$            132	0.756	$         99.81
3	$            185	0.658	$      121.64
4	$            256	0.572	$      146.37
5	$            316	0.497	$      157.11
6	$            383	0.432	$      165.58
7	$            277	0.376	$      104.13
8	$               98	0.327	$         32.04
9	$               43	0.284	$         12.22
10	$               25	0.247	$           6.18
Net Present Value			$     -233.83
The project is not acceptable.