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A project requires an initial cash outflow of $5,400, and it will bring in cash inflows...

A project requires an initial cash outflow of $5,400, and it will bring in cash inflows of $2,600, $2,500, $2,900, $1,400, for the next four years, respectively. What is the net present value of these cash flows, given a discount rate of 10%? (Round answers to two decimals, enter answer without $ or "," , such as 1234.78)

Solutions

Expert Solution

NPV = -Initial cash outflow + Present value of cash flows

NPV = -$5,400 + $2,600/1.10 + $2,500/1.10^2 + $2,900/1.10^3 + $1,400/1.10^4

NPV = $2,164.78

jeff jeffy answered 2 years ago
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