Answer:
The net present value of the project is closest to $144,128. The right answer is b
Explanation:
In order to calculate the The net present value of the project we would have to use the following formula:
Net present value = PV of cash inflows - Initial investment
Present value of cash inflows = Annual cash flow * PVIFA (N,I) where N = 4 and I = 8%
Present value of cash inflows= 119000 * PVIFA (4, 8%) = 119000 * 3.3121
Present value of cash inflows=$394,135
Therefore, Net present value= $394,135 - $250,000
Net present value= $144,135
The net present value of the project is closest to $144,128
