Calculate NPV for the following stream of cash flows: Year 1 is an outflow of $200...

Calculate NPV for the following stream of cash flows: Year 1 is an outflow of $200 for research; Years 2, 3 and 4 have a cash inflow each year of $100. The appropriate discount rate for valuation is 10%. NPV is

Expert Solution

Ans $ 44.26

Year	Project Cash Flows (i)	DF@ 10%	DF@ 10% (ii)	PV of Project ( (i) * (ii) )

1	-200	1/((1+10%)^1)	0.909091	(181.82)
2	100	1/((1+10%)^2)	0.826446	82.64
3	100	1/((1+10%)^3)	0.751315	75.13
4	100	1/((1+10%)^4)	0.683013	68.30
		NPV	44.26

jeff jeffy answered 1 year ago

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