Answer :
Net present value = -$18,375
Explanation :
As per the data given in the question,
Initial investment = $239,800
The project will generate operating cash flow pf $56,200 for 5 years
So present value of operating cash flow :
PMT = $56,200
N = 5 years
Rate = 15.2%
FV = $0
Now applying the formula
= -PV(RATE,NPER,PMT,FV,0)
The present value comes $187,502
Now
FV = $67,000
n = 5 years
Rate = 15.2%
PMT = $0
Now applying the formula
= -PV(RATE,NPER,PMT,FV,0)
The present value comes $33,023
Now the Net present value is
= ($33,023 + $187,502) - $238,900
= -$18,375
