Question

Patterson Co. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's NPV? Note that a project's expected NPV can be negative, in which case it will be rejected.

r.	10.00%
Year	0	1	2	3
Cash flows	−$950	$500	$400	$300

Answer 1

Ans:- we will use the excel NPV function to find the answer.

r is given 10% and Initial Investment is $950

Therefore the NPV is $60.52 which is Positive, therefore the Project should be accepted.

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