What is the NPV for the following project cash flows at a discount rate of 15 percent? CF₀ = ($1,000), CF₁ = $700, CF₂ = $700. A)($308.70) B)($138.00) C)$138.00 D)$308.70 NPV = $700

Question

Quizplus · Accepted Answer

The NPV calculation would be: 
NPV = (-$1,000/(1+0.15)^1) + ($700/(1+0.15)^2) + ($700/(1+0.15)^3) 
NPV = -$869.57 + $540.27 + $449.05 
NPV = -$308.70 
So the best choice is Option C, as it has a positive NPV.

What Is the NPV for the Following Project Cash Flows