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Margarita [4]
3 years ago
12

You are considering a project with projected annual cash inflows of $32,200, $41,800, $22,900 for the next three years, respecti

vely. What is the value of the project today at a discount rate of 14 percent
Business
1 answer:
mestny [16]3 years ago
7 0

Answer:

The value of the project today is $75,866

Explanation:

Net present value is the Net value all cash inflows and outflows in present value term. All the cash flows are discounted using a required rate of return.

Years                                  1                    2                    3  

Cash Flows                   $32200         $41800          $22,900

Discount Factor 14%     0.8772           0.7695           0.6750

Present Values             $28,245.61    $32,163.74    $15,456.85

Net present value = $75,866.20

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