Mujalli Corporation is considering a capital budgeting project that would require an initial investment of $200,000. The investment would generate annual cash inflows of $64,000 for the life of the project, which is 4 years. At the end of the project, equipment that had been used in the project could be sold for $10,000. The company's discount rate is 9%. The net present value of the project is closest to:

Question

Quizplus · Accepted Answer

The NPV is calculated by discounting the cash inflows and the salvage value at the end of the project, subtracting the initial investment. The NPV is closest to $14,376.

Mujalli Corporation Is Considering a Capital Budgeting Project That Would