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What is NPV How Do you calculate for the two NPV calculations and provide below The following is some of the estimated data you have:
- What is NPV
- How Do you calculate for the two NPV calculations and provide below
The following is some of the estimated data you have:
- You both decided to finance the project using your own funds.
- The cost of the equipment will be $80,000 and this cost is incurred prior to any cash is received by the project.
- The expected cash inflows are the most variable of the estimates. Your partner is convinced that the firm will receive $14,000 annually for 7 years. You have your doubts. You think it is more reasonable that there will be cash inflows of $14,000 in year 1, then inflows of $16,000 from years 2-4, and then inflows of $17,000 for years 5-7.
- You both agree that after 7 years, the equipment will stop working and can be sold for its parts for about $5,000.
- You both consider a discount rate of 7% but remain open to other future possibilities.
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