A project has an initial cash outflow of $39,800 and produces cash inflows of $18,304, $19,516, and

Question:

A project has an initial cash outflow of $39,800 and produces cash inflows of $18,304, $19,516, and $14,280 for years 1 through 3, respectively. What is the NPV at a discount rate of 11 percent?

a. $2,971.13

b. -$1,208.19

c. $1,311.16

d. $2,029.09

e. $7,675.95

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...