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A company is considering the purchase of a copier that cost $5,000. Assume a required rate...

A company is considering the purchase of a copier that cost $5,000. Assume a required rate of return of 9% and the following cash flow schedule:
• Year 1: $2,000
• Year 2: $3,000
• Year 3: $1,000

What is the project's NPV?

Solutions

Expert Solution

Calculation of NPV
Time Cashflow PVF @9% PV
               -   -5000                                      1.00                                    -5,000.00
          1.00 2000                                 0.9174                                     1,834.86
          2.00 3000                                 0.8417                                     2,525.04
          3.00 1000                                 0.7722                                         772.18
                                        132.09
NPV is $132.09

jeff jeffy answered 1 year ago
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