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What is the net present value of a project with the following cash flows if the

ID: 2659209 • Letter: W

Question

What is the net present value of a project with the following cash flows if the required rate of return is 9 percent?

Year 0 :  -$42,398

Year 1:  $18,201

Year 2:  $21,219

Year 3:  $17,800


Need explanation of how to get to answer.

It's either:

-$1,574.41

-$1,208.19

$5,904.65

or $6,029.09

What is the net present value of a project with the following cash flows if the required rate of return is 9 percent? Year 0 : -$42,398 Year 1: $18,201 Year 2: $21,219 Year 3: $17,800 Need explanation of how to get to answer. It's either: -$1,574.41 -$1,208.19 $5,904.65 or $6,029.09

Explanation / Answer

What is the net present value of a project with the following cash flows if the required rate of return is 9 percent?

Year 0 : -$42,398

Year 1: $18,201

Year 2: $21,219

Year 3: $17,800




NPV = 18201/1.09 + 21219/1.09^2 + 17800/1.09^3 - 42398 = $ 5904.65



Answer : $ 5904.65

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