Your storage firm has been offered $97,100 in one year to store some goods for one...
Your storage firm has been offered $97,100 in one year to store some goods for one year. Assume your costs are $95,700, payable immediately, and the cost of capital is 8.5%. What is the NPV of this project? The NPV will be _______________________. (Round to the nearest cent.)
A.−$ 6,206.91
B.−$ 6,511.10
C.−$ 7,011.22
D.−$ 4,599.82
Homework Answers
Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)
=97100/1.085
=89493.09
NPV=Present value of inflows-Present value of outflows
=89493.09-$95700
=($6206.91)(Approx)(Negative).
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