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estion Completion Status: Moving to another question will save this response sti

ID: 2799471 • Letter: E

Question

estion Completion Status: Moving to another question will save this response stion 15 vestment of $109,232. The cash nows over the three year ie of the investment are the tolo Rubben LLG is evaluating a new project with an iniial in the fim expeots to receive $40,462 in the first year, $46,051 in the second year, and 951,444 in the third year. The project wll be olosed out at If the firm requires a rate of return of 10 percent, what is the net present value of this investment? wing Moving to another question will save this response

Explanation / Answer

Calculation of NPV Year Cash Flows PVF @10% Present Value of Cash flows 1 40462 0.909 36779.958 $ 2 46051 0.826 38038.126 $ 3 51444 0.751 38634.444 $ 113452.528 $ Initial Investment 109232 $ Net present Value 4220.528 $