Use the table for the question(s) below.

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Cromwell Industries is considering a new project which will have costs,revenues,etc.as shown by the data above.If the cost of capital is 8.5%,what is the net present value (NPV)of this project?

Question

Use the table for the question(s) below.
 
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Cromwell Industries is considering a new project which will have costs,revenues,etc.as shown by the data above.If the cost of capital is 8.5%,what is the net present value (NPV)of this project?

Quizplus · Accepted Answer

C) CF0 = -600,000
CF1 = 146,250 + 150,000 + 12,000 = 308,250;
CF2 = 97,500 + 225,000 + 12,000 = 334,500;
CF3 = 170,625 + 112,500 + 12,000 = 295,125;
calculate NPV at 8.5% = $199,300.

Use the Table for the Question(s) Below