The company has a project with a $5-$year life that requires an initial investment of $$190,000,$ and is expected to yield annual cash flows of $$64,000.$ What is the net present value of the project if the required rate of return is set at $12\%?$

Calculation Steps

Present Value of an Annuity of $$1$ at Compound Interest.

Net Present Value $=($ $fill in the blank b$14$bac$046$fba$027\_4$ x fill in the blank b$14$bac$046$fba$027\_5)$ $fill in the blank b$14$bac$046$fba$027\_6$

Note: Round your answer to the nearest whole dollar.

What NPV does the previous calculation yield? $fill in the blank b$14$bac$046$fba$027\_7$

Based on the NPV computed above, what is indicated?

$1.$ The project is

$2.$

$,$ the initial investment will be recovered.

$3.$

$,$ the required rate of return will be recovered.

$4.$ A

NPV in excess of the initial investment and required rate of return has been achieved.Calculation Steps

Present Value of an Annuity of $$1$ at Compound Interest.

Note: Round your answer to the nearest whole dollar.

What NPV does the previous calculation yield? &

Based on the NPV computed above, what is indicated?

The project is

A

has been achieved.

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Click on the Present Value of an Annuity of $$1$ at Compound Interest link and look for the intersection of the number of years row and the required rate of return column.

:$.,$ the initial investment will be recovered.

$,$ the required rate of return will be recovered.

NPV in excess of the initial investment and required rate of return