An investment project requires a net investment of $100,000.The project is expected to generate annual net cash inflows of $28,000 for the next 5 years.The firm's cost of capital is 12 percent.Determine the net present value for the project.
A)$940
B)$100,940
C)$77,884
D)$40,000

Question

Quizplus · Accepted Answer

NPV = 28,000(PVIF₀.₁₂,₅) - 100,000 = $28,000(3.605) - 100,000 = $940

An Investment Project Requires a Net Investment of $100,000