Question
1. What is the NPV of the following project if the discount rate is 11%? Round to the nearest cent. Investment today: $-129,000; Cash flow
1.
What is the NPV of the following project if the discount rate is 11%? Round to the nearest cent. Investment today: $-129,000; Cash flow in year 1: $64,000; Cash flow in year 2: $73,000; Cash flow in year 3: $64,000. [Hint: A negative cash flow is just an indication that it is an outflow. Don't enter it as a negative number in the NPV formula. Outflows should be factored in NPV calculations as positive numbers.]
2.
What is the NPV of a project that costs $109,000 today and is expected to generate annual cash inflows of $13,000 for the next 11 years, followed by a final inflow of $22,000 in the year after. Use discount rate of 13%. Round to the nearest cent.
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