Question

Question 3 (1 point) You are making a $120,000 investment and feel that a 16% rate of return is reasonable, given the nature of the risks involved. You expect to receive $48,000 in the first year, $54,000 in the second year, and $76,000 in the third year. You expect to pay out $12,000 as a disposal cost in the fourth year. What is the net present value of this investment given your expectations? Your Answer: Answer

Answer 1

Hello Sir/ Mam

YOUR REQUIRED ANSWER IS $3,572.60

The present value schedule:

Rate			16%
Time	Cashflows	PVF	PV
0	-$1,20,000.00	1	-$1,20,000.00
1	$48,000.00	0.862068966	$41,379.31
2	$54,000.00	0.743162901	$40,130.80
3	$76,000.00	0.640657674	$48,689.98
4	-$12,000.00	0.552291098	-$6,627.49
NPV			$3,572.60

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