What is the NPV of a project that has an initial investment of $7,300, with end...

What is the NPV of a project that has an initial investment of $7,300, with end of year cash flows as follows: year 1: $1,500 year 2: $2,500 year 3: $3,000 year 4: $2,500 year 5: $1,500 The interest rate is 8%

Expert Solution

Ans NPV = $ 1554

Year	Project Cash Flows (i)	DF@ 8%	DF@ 8% (ii)	PV of Project A ( (i) * (ii) )
0	-7300	1	1	(7,300)
1	1500	1/((1+8%)^1)	0.926	1,389
2	2500	1/((1+8%)^2)	0.857	2,143
3	3000	1/((1+8%)^3)	0.794	2,381
4	2500	1/((1+8%)^4)	0.735	1,838
4	1500	1/((1+8%)^5)	0.735	1,103
		NPV		1,554

jeff jeffy answered 1 year ago

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