In: Finance
An investment under consideration has a payback of eight years and a cost of $868,000. Assume the cash flows are conventional. |
If the required return is 10 percent, what is the worst-case NPV? |
NPV = -Initial cost + Present value of cash flows
NPV = -$868,000 + $868,000/1.10^8
NPV = -$463,071.59