A project will produce cash inflows of $2,800 a year for 4 years with a final cash inflow of $5,700 in year 5.The project's initial cost is $9,500.What is the net present value of this project if the required rate of return is 16 percent?
A)-$311.02
B)$1,048.75
C)$4,650.11
D)$9,188.98
E)$11,168.02

Question

Quizplus · Accepted Answer

The net present value (NPV) is calculated by discounting the future cash inflows at the required rate of return and subtracting the initial investment. The NPV is $1,048.75 when calculated with a 16% discount rate.

A Project Will Produce Cash Inflows of $2,800 a Year