39. A project has expected cash flows as shown below: Year 1 0 1-4 5-7 8...

Question

Question

business finance

Answer 1

Answer #1

NPV = Present value of cash inflows – Present value of cash outflows

= -25000 + 5000*PVAF(12%, 1- 4 years) + 4000*PVAF(12%, 5-7 years) + 8000*PVF(12%, 8 years) + 7000*PVF(12%, 9 years)

= -25000 +5000*3.0373 + 4000*1.5264 + 8000*0.4039 + 7000*0.3606

= $2,047.5

Answer 2

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