A machine has a cost of $5,375,000.It will produce cash inflows of $1,825,000 (year 1); $1,775,000 (year 2); $1,630,000 (year 3); $1,585,000 (year 4); and $1,650,000 (year 5).At a discount rate of 16.25%, what is the NPV?
A)$81724
B)$257,106
C)$416,912
D)$190,939

Question

Quizplus · Accepted Answer

The NPV (Net Present Value) is calculated by discounting the future cash inflows at the given discount rate and then subtracting the initial investment. Using the given cash inflows and a discount rate of 16.25%, the NPV calculation results in $190,939.

A Machine Has a Cost of $5,375,000