Question

A given project requires a $24,217 investment and is expected to generate end of period annual...

A given project requires a $24,217 investment and is expected to generate end of period annual cash flows as follows:

Year 1 Year 2 Year 3
$11,439 $8,000 $10,000

Assuming a discount (interest) rate of 10%, what is the net present value of this investment? Use the table in your book and do not round the numbers from the table. You can round your answer to the nearest dollar, but do not include a dollar sign in your answer. If your answer is negative, include a negative sign before the number (for example, -3000).

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Answer #1

Answer to question

A) Initial Cash Outflow $ 24,217.00
B) Cash Inflow
Year cash Inflow Discount factor Present value of cash Flow Note 1
1 $ 11,439.00 0.909090909 $ 10,399.09
2 $   8,000.00 0.826446281 $   6,611.57
3 $ 10,000.00 0.751314801 $   7,513.15
$ 24,523.81
Net Present value of this investment $       306.81
Note
1. Future Cashflow converted to present Value
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