Priscella pursued a hobby of making bedspreads in her spare time. Her AGI before considering the hobby is $40,000. During 2019 s
1 answer:
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Answer: Net Present Value = -$19,062
Explanation:
First, we'll compute the PV for the respective years
Present Value (Year-1)
=
=0.6179945
Present Value (Year-2)
=
=0.614904528
Present Value (Year-3)
=
=0.611830005
Now, we'll compute the Cash Flow for the respective years
Cash Flow (Initial)
=
= -$209,306.07
Cash Flow (Year-1)
=
=$32,362.75
Cash Flow (Year-2)
=
=$81,313.44
Cash Flow (Year-3)
=
=$147,099.68
Net Present Value:
= -$209,306.07 + ($32,362.75/1.141)+ ($81,313.44/1.142) +($147,099.68/1.143)
= -$209,306.07 +$28,388.38 + $62,568.05 + $99,288.10
= -$19,062