Answer:
The net present value of this project is $1<u>3,587,962.96</u>
Explanation:
<em>The </em><em>Net present value (NPV)</em><em> is the difference between the present value of cash inflows and the present value of cash outflows from a decision. A positive NPV indicates a profitable investment and a negative the opposite.</em>
<em>We can be work out the NPV of Turnbull Corp as follows</em>
Present Value
Year 1 13000,000× *(1.2^(-1) = 10,833,333.3
Year 2 23,000,000 × 1.2^(-2) = 15,972,222.22
Year 3 29,000,000 × 1.2^( -3) = <u>16,782,407.41 </u>
Total PV of cash inflows 43,587,963.0
Less the PV of cash outflow <u> (30,000,000)</u>
Net Present Value (NPV) <u>13,587,962.96</u>
The net present value of this project is $1<u>3,587,962.96</u>
