Question

A project costing $6,200 initially should produce cash inflows of $2,860 a year for three years. After the three years, the project will be shut down and will be sold at the end of Year 4 for an estimated net cash amount of $3,300. What is the net present value of this project if the required rate of return is 11.3 percent

Answer 1

Answer:

Net present value of the project is $2,903

Explanation:

Net present value is the net of present value of all cash inflow or outflow of a project. It measure the net outcome of a project in current value terms. All the cash flows are discounted using a required rate of return.

All the calculations and workings are in the attached MS excel find please find it.

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