Which of the following is a correct equation to solve for the NPV of the project that has an initial outlay of $30,000,followed by incremental cash inflows in the next 3 years of $15,000,$20,000,and $30,000? Assume a discount rate of 10%.
A) NPV = - $30,000 + $15,000(1.10) 1 + $20,000(1.10) 2 + $30,000(1.10) 3
B) NPV = - $30,000 + $15,000/(1.10) 1 + $20,000/(1.10) 2 + $30,000/(1.10) 3
C) NPV = - $30,000 + $15,000/(1.01) .10 + $20,000/(1.02) .10 + $30,000/(1.03) .10
D) NPV = - $30,000 + $15,000/(1.1) .10 + $20,000(1.2) .10 + $30,000(1.3) .10
Correct Answer:
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