What is the minimum cash flow that could be received at the end of year 3 to make the following project "acceptable"? Initial cost = $100,000; cash flows at end of years 1 and 2 = $35,000; opportunity cost of capital = 10%.
A) $29,494
B) $30,000
C) $39,256
D) $52,250

Question

Quizplus · Accepted Answer

NPV = 0 − $100,000 + ($35,000 / 1.1) + $35,000 / 1.1² + $x / 1.1³; x = $52,250A cash flow of $52,250 received in year 3, and discounted at 10%, would increase the NPV to zero.

What Is the Minimum Cash Flow That Could Be Received