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Use the following cash flow with a 5% discount rate: Year Cash Flow 0 -$ 80,000 1 20,000 2...

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Finance

Use the following cash flow with a 5% discount rate:


Year Cash Flow
0 -$ 80,000
1 20,000
2 15,000
3 20,000
4 25,000
5 30,000

What is the NPV?

$ 9,154

-$2,567

$14,003

$10,036

Answer & Explanation Solved by verified expert
4.2 Ratings (767 Votes)

Calculation of net present value of project :
Time Cashflow PVF @5% PV
               -   -80000                                      1.00                                 -80,000.00
          1.00 20000                                 0.9524                                   19,047.62
          2.00 15000                                 0.9070                                   13,605.44
          3.00 20000                                 0.8638                                   17,276.75
          4.00 25000                                 0.8227                                   20,567.56
          5.00 30000                                 0.7835                                   23,505.78
                                  14,003.16
So correct answer is $14003

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Transcribed Image Text

Use the following cash flow with a 5% discount rate:Year Cash Flow0 -$ 80,0001 20,0002 15,0003 20,0004 25,0005 30,000What is the NPV?$ 9,154-$2,567$14,003$10,036

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