Question

(Question 8)
Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project
Year 0 1 2 3 4 5
project $11,368,00 $2,157,590 $3,787,552, $3,275,650 $4,115,899 $4,556,424
Round to two decimal places.

(Question 8)
Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV project?
Year 0 1 2 3 4 5
Project ($11,368,000) $2,157,590 $3,787,552 $3,275,650 $4,115,899 $4,556,424 Round to two decimal places.

Answer 1

Present Value = Future value/ ((1+r)^t)
where r is the interest rate and t is the time period
r	0.138
Net present value (NPV) = initial investment + sum of present values of future cash flow.
Year	0	1	2	3	4	5
cash flow	-1136800	2157590	3787552	3275650	4115899	4556424
present value		1895949	2924651	2222648	2454119	2387332
Net present value	10747899.57
Based on the cash flows, the NPV of the project is $10747899.57.