What is the NPV for the following project if its cost of capital is 0 percent and its initial after tax cost is $5,000,000 and it 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?

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Quizplus · Accepted Answer

With a 0% cost of capital, the NPV is the sum of all cash inflows minus the initial cost: $1,800,000 + $1,900,000 + $1,700,000 + $1,300,000 - $5,000,000 = $1,700,000.

What Is the NPV for the Following Project If Its