Exhibit 14.3
The executives of Garner-Wagner Inc. are considering a project that has an up-front cost of $3 million and is expected to produce a cash flow of $500,000 at the end of each of the next 5 years. The project's cost of capital is 10%.

-Refer to Exhibit 14.3.Based on the above data,what is the project's net present value?

Question

Exhibit 14.3
The executives of Garner-Wagner Inc. are considering a project that has an up-front cost of $3 million and is expected to produce a cash flow of $500,000 at the end of each of the next 5 years. The project's cost of capital is 10%.

-Refer to Exhibit 14.3.Based on the above data,what is the project's net present value?

Quizplus · Accepted Answer

Find the project's NPV using a financial calculator and entering the following data inputs: CF₀ = −3,000,000; CF₁₋₅ = 500,000; I/YR = 10; and then solve for NPV = −$1,104,607.

Exhibit 14.3 The Executives of Garner-Wagner Inc. Are Considering a Project That