Answer:
$ -3,163.04
No
Explanation:
The net present value is the present value of after tax cash flows from an investment to the amount invested.
The NPV can be found using a financial calculator:
Cash flow in year 0 = -$60,000
Cash flow in year 1- $ 15,000
Cash flow in year 2- $25,000
Cash flow in year 3- $40,000 - $10,000 = $30,000
I = 10%
NPV = $-3,163.04
The project should not be embarked upon because the cost of the project is greater than the present value of the after tax cash flows. The NPV is negative.
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
