contestada

What is the net present value of a project that has an initial cost of $40,000 and produces cash inflows of $8,000 a year for 11 years if the discount rate is 15 percent?

Respuesta :

First find the present value of cash inflows using the formula of
Pv=pmt [(1-(1+r)^(-n))÷r]
Pv=8,000×((1−(1+0.15)^(−11))÷(0.15))
pv=41,869.69

The net present value is
NPV=41,869.69−40,000=1,869.69