You are offered an investment with returns of $ 1,758 in year 1, $ 3,380 in...

You are offered an investment with returns of $ 1,758 in year 1, $ 3,380 in year 2, and $ 3,106 in year 3. The investment will cost you $ 7,198 today. If the appropriate Cost of Capital (quoted interest rate) is 6.1 %, what is the Net present Value of the investment? Enter your answer to the nearest $.01. Do not use the $ sign or commas in your answer. If the NPV is negative, use the - sign.

Expert Solution

Ans 61.94

Year	Project Cash Flows (i)	DF@ 6.1%	DF@ 6.1% (ii)	PV of Project A ( (i) * (ii) )
0	-7198	1	1	(7,198.00)
1	1758	1/((1+6.1%)^1)	0.943	1,656.93
2	3380	1/((1+6.1%)^2)	0.888	3,002.52
3	3106	1/((1+6.1%)^3)	0.837	2,600.49
		TOTAL CASH INFLOW		61.94

jeff jeffy answered 1 year ago

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