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determine the net present value of this investment, assuming a 10% minimum rate of return. use the present value tables provided above. if required, round to the nearest whole dollar.

Sagot :

varshamittal029

The net present value of this investment is $19228

                                Table value             Cash                 Present value
                                                                  Flow                    Cash flow
1                                0.870                  $72000                    $62640
2                               0.756                  $55000                    $41580
3                               0.658                  $42000                    $27636
4                               0.572                  $28000                    $16016
Present value                                                                       $147872
of net cash flow
(Less) Amount to be                                                               ($16700)

Net present value                                                               ($19228)

No, because the net present value indicates that the return on the proposal is less than the minimum rate of interest 15%.

Net present value- The difference between the present value of cash inflows and the present value of cash outflows over time is defined as net present value. The net present value (NPV) is a calculation used in capital budgeting and investment to determine the profitability of a proposed investment or project.

                                                                   
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