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The Following Details Are Provided by Ferrous Foundry Company PV of $1

Question 103

Multiple Choice

The following details are provided by Ferrous Foundry Company:  Initial investment $5,000,000 Discount rate 15% Yearly cash inflows 1$1,256,0002$1,360,0003$2,402,0004$1,158,000\begin{array} { | c | r | } \hline \text { Initial investment } & \$ 5,000,000 \\\hline \text { Discount rate } & 15 \% \\\hline \text { Yearly cash inflows } & \\\hline 1 & \$ 1,256,000 \\\hline 2 & \$ 1,360,000 \\\hline 3 & \$ 2,402,000 \\\hline 4 & \$ 1,158,000 \\\hline\end{array} PV of $1:
13%14%15%10.8850.8770.8720.7830.7690.75630.6930.6750.65840.6130.5920.572\begin{array} { | c | c | c | c | } \hline & 13 \% & 14 \% & 15 \% \\\hline 1 & 0.885 & 0.877 & 0.87 \\\hline 2 & 0.783 & 0.769 & 0.756 \\\hline 3 & 0.693 & 0.675 & 0.658 \\\hline 4 & 0.613 & 0.592 & 0.572 \\\hline\end{array} What is the NPV of the project?


A) $(636,228)
B) $590,000
C) $618,409
D) $(594,486)

Correct Answer:

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