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Anna [14]
3 years ago
4

Daniel's Market is considering a project with an initial cost of $176,500. The project will not produce any cash flows for the f

irst three years. Starting in Year 4, the project will produce cash inflows of $127,500 a year for three years. This project is risky, so the firm has assigned it a discount rate of 17 percent. What is the project's net present value?
Business
1 answer:
ohaa [14]3 years ago
6 0

Answer:

NPV = -$601.026

Explanation:

Using a financial calculator , you can solve this question with the following inputs and using the CF function. I'll be using TI BA II plus financial calculator;

After keying in each CF , press ENTER and scroll down twice before keying in the next cashflow;

CF0= -176,500

CF1= 0

CF2=0

CF3 =0

CF4 =127,500

CF5= 127,500

CF6 = 127,500

then press "NPV" button, then I = 17 and press CPT.

Therefore NPV = -$601.026

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