What-is-the-Net-Present-Value-business-and-finance-homework-help
1. Calculate the NPV of a project with the following cash flows and a 12% discount rate:
Year 0 1 2 3 4
Cash Inflows $0 $125 $150 $200 $225
Cash Outflows $400 $150 $100 $50 $50
From years 5 – 9, you will receive net cash inflows of $100 per year (hint: use ordinary annuity valuation formula with 12% as the interest rate, and be careful when deciding how many periods it takes to discount it to the present value).