A project will produce cash inflows of $2,250 a year for five years. the project initially costs $11,400 to get started. in year six, the project will end and will provide a final cash flow of $1,500. what is the net present value of this project if the required rate of return is 14.4 percent?

a.

b.

c. $461.07

d. $919.92

e. $1,207.50

Question

Business

Ian Brandt

27 March, 18:43

A project will produce cash inflows of $2,250 a year for five years. the project initially costs $11,400 to get started. in year six, the project will end and will provide a final cash flow of $1,500. what is the net present value of this project if the required rate of return is 14.4 percent?

a.

b.

c. $461.07

d. $919.92

e. $1,207.50

+4

Answers (1)

Know the Answer?

Lucian Benitez · Answer 1

-$3,080.

Using the CF function of your financial calculator, input the initial investment as a cash outflow (negative) of $11,400, then each of the cash inflows (positive) as $2,250 for each of the first 5 years and $1,500 for the sixth year. Hit the NPV button and input the required rate of return as 14.4% then the NPV will be - $3,080.