Altman Hydraulic Corporation will invest $160,000 in a project that will produce the cash flow shown below.

Question:

Altman Hydraulic Corporation will invest $160,000 in a project that will produce the cash flow shown below. The cost of capital is 11 percent. Should the project be undertaken? Use the net present value method.

Year Cash Flow

1 ....................$ 54,000

2 .................... 66,000

3 .................... (60,000)

4 .................... 57,000

5 .................... 120,000

Net Present Value
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