What is the net present value of a project that has an initial cost of $40,000 and produces cash inflows of $ 8,500 a year for 10 years if the discount rate is 13 percent?
A)$ 4,678.09
B)$ 6,500.00
C)$ 6,123.07
D)$ 7,189.34
E)$ 6,712.03

Question

Quizplus · Accepted Answer

The net present value (NPV) is calculated by discounting the cash inflows at the given discount rate and subtracting the initial cost. Using the formula for NPV and a discount rate of 13%, the NPV is approximately $6,123.07.

What Is the Net Present Value of a Project That