What is the net present value of a replacement project whose cash flows are -$875,000; $498,000;...

What is the net present value of a replacement project whose cash flows are -$875,000; $498,000; $731,000; and $140,000 for years 0 through 3, respectively? The firm has decided to assume that the appropriate cost of capital is 16.8% p.a. (round to the nearest dollar)

Select one:

a. $175067

b. $1925067

c. $24030

d. $265088

Solutions

Expert Solution

Correct Option is (a) $175067

explanations and calculations

Option (a) $ 175067 :- Correct ( Calculations are given in below image)

Option (b) $1925067 :- incorrect

option (c) $2430 :- incorrect

Option (d) $ 265088 :- incorrect.

Calculations of NPV are given in below images

jeff jeffy answered 1 year ago

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