Question

Calculate NPV for each project. Please workout problem..

Discount rate	10%
Year	Project A	Project B	Project C
2018	($3,000,000)	($3,000,000)	($3,200,000)
2019	$0	$975,000	$985,000.00
2020	$600,000	$975,000	$925,000.00
2021	$900,000	$975,000	$1,000,000.00
2022	$3,000,000	$1,000,000	$950,000.00

Answer 1

Project - A

Year	Cash Flow	Present Value Factor	Present Value of cash flow
1	0	0.90909	0
2	600,000.00	0.826446	495,867.77
3	900,000.00	0.751314	676,183.32
4	3,000,000.00	0.683013	2,049,040.37
Total Present Value of cash flows			3,221,091.46

Net Present Value = Present Value of cash flows – Initial Investment

= $3,221,091.46 – 30,00,000

= $221,091.46

Project - B

Year	Cash Flow	Present Value Factor	Present Value of cash flow
1	975,000.00	0.90909	886,363.64
2	975,000.00	0.826446	805,785.12
3	975,000.00	0.751314	732,531.93
4	1,000,000.00	0.683013	683,013.46
Total Present Value of cash flows			3,107,694.15

Net Present Value = Present Value of cash flows – Initial Investment

= $3,107,694.15 – 30,00,000

= $107,694.15

Project - C

Year	Cash Flow	Present Value Factor	Present Value of cash flow
1	985,000.00	0.90909	895,454.55
2	925,000.00	0.826446	764,462.81
3	1,000,000.00	0.751314	751,314.8
4	950,000.00	0.683013	648,862.78
Total Present Value of cash flows			3,060,094.94

Net Present Value = Present Value of cash flows – Initial Investment

= $3,060,094.94 – 32,00,000

= -$139,905.06 [Negative NPV]