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An investment has an installation cost of $574,380. The cash flows over the four-years life of the investment are projected to be $216,700, $259,300, $214,600,
An investment has an installation cost of $574,380. The cash flows over the four-years life of the investment are projected to be $216,700, $259,300, $214,600, and $167,410, respectively. If the discount rate is zero, what is the NPV? If the discount rate is infinite, what is the NPV? At what discount rate is the NPV just equal zero? Sketch the NPV profile for this investment based on these three points. (Hint: use the financial calculator to find the discount rate when NPV = 0)
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