What is the NPV for a project whose cost of capital is 15 percent and initial after-tax cost is $5,000,000 and is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and $1,300,000 in year 4?

Question

Quizplus · Accepted Answer

The NPV is calculated by discounting the cash inflows at the cost of capital and subtracting the initial investment. The NPV is negative, indicating the project does not cover its cost of capital.

What Is the NPV for a Project Whose Cost of Capital