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How is the answer C, for this question? More specifically, how would I be able to find the PVIFA? when using the equation PVIFA =
How is the answer C, for this question?
More specifically, how would I be able to find the PVIFA? when using the equation PVIFA = 1 - [1 / (1 + r)^n)] / r ), I get an answer of -5.21 when I've seen other posts get the answer 3.7908. Could someone please explain what I am missing by using an Excel spreadsheet for using the equations? I tried using the NPV formula in Excel and didn't give a correct answer. Seeing as there isn't a formula for PVIFA I guess that would make sense.
Leonard, Inc. is considering a five-year project that has an initial after-tax outlay or after-tax cost of $70,000. The future after-tax cash inflows from its project for years 1, 2, 3, 4 and 5 are all the same at $35,000. Leonard uses the net present value method and has a discount rate of 10%. Will Leonard accept the project? C O A. Leonard accepts the project because the NPV is about $69,455. O B. Leonard rejects the project because the NPV is about - $13,382. O C. Leonard accepts the project because the NPV is about $62,678. O D. Leonard rejects the project because the NPV is less than $33,021
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