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Stanton,Inc

Question 51

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Stanton,Inc.wants to analyze the NPV profile for a five-year project that is considered to be very risky.The project's initial outlay or cost is $80,000 and it has respective cash inflows for years 1,2,3,4 and 5 of $15,000,$25,000,$35,000,$45,000 and $55,000.Stanton wants to know how the NPV will change for the following required rates of returns: 9%,14%,19%,24%,and 29%.From the NPV profile,at about what rate will the NPV be equal to zero?

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Let us first compute the NPV for 9%.We h...

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