Question
. Computing net present value. Gators, Inc., is considering a project that requires an initial investment of $2,000,000 and that will generate the following cash
. Computing net present value. Gators, Inc., is considering a project that requires an initial investment of $2,000,000 and that will generate the following cash inows for the next ve years: Year Cash Inflow at End of Year 1............................................................................................................................................ $300,000 2............................................................................................................................................ 400,000 3............................................................................................................................................ 800,000 4............................................................................................................................................ 800,000 5............................................................................................................................................ 600,000 Calculate the net present value of this project if Gators cost of capital is a. 12 percent. b. 20 percent.
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