Question
Aerospace Dynamics will invest $155,000 in a project that will produce the following cash flows. The cost of capital is 10 percent. (Note that the
Aerospace Dynamics will invest $155,000 in a project that will produce the following cash flows. The cost of capital is 10 percent. (Note that the fourth years cash flow is negative.) Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Cash Flow 1 $ 45,000 2 57,000 3 60,000 4 (53,000 ) 5 125,000 a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value $ b. Should the project be undertaken? Yes No
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