A $400,000 capital investment proposal has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows: $$\begin{array} { l l }
\text { Year } & \text { Net Cash Flow } \
1 & \$ 200,000 \
2 & 150,000 \
3 & 90,000 \
4 & 80,000
\end{array}$$ The minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is 0.893, 0.797, 0.712, and 0.636, respectively.
Determine the net present value.

Question

A $400,000 capital investment proposal has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows: $$\begin{array} { l l } 
\text { Year } & \text { Net Cash Flow } \
1 & \$ 200,000 \
2 & 150,000 \
3 & 90,000 \
4 & 80,000
\end{array}$$ The minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is 0.893, 0.797, 0.712, and 0.636, respectively.
Determine the net present value.

Quizplus · Accepted Answer

The Answer of A $400,000 capital investment proposal has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows: $$\begin{array} { l l } 
\text { Year } & \text { Net Cash Flow } \
1 & \$ 200,000 \
2 & 150,000 \
3 & 90,000 \
4 & 80,000
\end{array}$$ The minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is 0.893, 0.797, 0.712, and 0.636, respectively.
Determine the net present value.

A $400,000 Capital Investment Proposal Has an Estimated Life of 4