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Santon inc. Wants to analyze the NPV profile for a five years project that is considered...

Santon inc. Wants to analyze the NPV profile for a five years project that is considered to be risky. The project initial outlay or cost is 90,000$ and it has respective cash inflows for years 1,2,3,4 and 5 of 15,000$,25,000$,35,000$,45,000$ and 55,000$. Calculate its NPV and indicate whether the NPV becomes negative or positive by using discount rate of 14%

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Answer #1

Without using discount rate ,cash inflows are higher than cash outlay so the project is preferrable

NPV is positive even after using Discount rate of 14% so project can be opted

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