Question
What is the NPV of a project that has an initial investment of $100,000, and expected cash flows of $45,000 each year for years 1
What is the NPV of a project that has an initial investment of $100,000, and expected cash flows of $45,000 each year for years 1 through 3? Use an 8% hurdle (aka discount) rate. Is this a project you should accept or reject? Calculate the Profitability Index for the project as well.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the Net Present Value NPV of the project we need to discount each cash flow back to ...
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Step: 2
Step: 3
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
12th edition
978-0324597714, 324597711, 324597703, 978-8131518571, 8131518574, 978-0324597707
