Coax Corporations is considering a project that will pay nothing for the first three years, $80,000 in the fourth year, $120,000 in the fifth year, and $160,000 in the sixth year. The appropriate discount rate is 8.8%, and the project requires an immediate investment of $150,000 if we accept the project.
The NPV of this project is Select one: a. $149,135. b. $124,939. c. $94,901. d. $82,263.
Please show step by step calculations and provide explanations.*No Excel
Net present value can be solved using a financial calculator. The steps to solve on the financial calculator:
Net present value at 8.8% discount rate is $82,262.99 $82,263.
Hence, the answer is option d.
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