Question
A company is considering an investment in a project with an initial cost of $100,000 and is expected to generate cash flows of $30,000 per
A company is considering an investment in a project with an initial cost of $100,000 and is expected to generate cash flows of $30,000 per year for the next 5 years. The company uses a discount rate of 10%.
Instructions: Calculate the net present value (NPV) of the investment using the formula NPV = ?(CFt / (1 + r)^t), where CFt is the cash flow at time t, and r is the discount rate.
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Valuation The Art and Science of Corporate Investment Decisions
Authors: Sheridan Titman, John D. Martin
3rd edition
133479528, 978-0133479522
