Question

What is the net present value of a project with the following cash flows if the required rate of return is 9 percent? Year Cash Flow 0 -$42,398 1 18,201 2 21,219 3 17,800 Group of answer choices -$1,574.41 -$1,208.19 $5,904.64 $6,029.09 $6,311.16

Answer 1

Answer:

$5,904.64

Explanation:

We discount the future cashflows to their present values to determine the net present value.

Using the CFj function of the Financial Calculator, this will be set as :

-$42,398    CFj 0

$18,201       CFj 1

$21,219       CFj 2

$17,800      CFj 3

I/Yr = 9 %

Therefore,

the net present value is $5,904.64