What is the net present value of a project that has an initial cash outflow of $12,670 and the following cash inflows? The required return is 11.5%. $$\begin{array} { c l }
\text { Year } & \text { Cash Inflows } \
\hline 1 & \$ 4,375 \
2 & \$ \quad 0 \
3 & \$ 8,750 \
4 & \$ 4,100
\end{array}$$
A)$218.68
B)$370.16
C)$768.20
D)$1,249.65
E)$1,371.02

Question

What is the net present value of a project that has an initial cash outflow of $12,670 and the following cash inflows? The required return is 11.5%. $$\begin{array} { c l } 
\text { Year } & \text { Cash Inflows } \
\hline 1 & \$ 4,375 \
2 & \$ \quad 0 \
3 & \$ 8,750 \
4 & \$ 4,100
\end{array}$$
A)$218.68
B)$370.16
C)$768.20
D)$1,249.65
E)$1,371.02

Quizplus · Accepted Answer

The net present value (NPV) is calculated by discounting each cash inflow at the required return rate and subtracting the initial investment. The NPV is $218.68.

What Is the Net Present Value of a Project That Year Cash Inflows 1$4,3752$03$8,7504$4,100\begin{array} { c l } \text { Year } & \text { Cash Inflows } \\\hline 1 & \$ 4,375 \\2 & \$ \quad 0 \\3 & \$ 8,750 \\4 & \$ 4,100\end{array} Year 1234​ Cash Inflows $4,375$0$8,750$4,100​​

What Is the Net Present Value of a Project That $\begin{array} { c l } \text { Year } & \text { Cash Inflows } \\\hline 1 & \$ 4,375 \\2 & \$ \quad 0 \\3 & \$ 8,750 \\4 & \$ 4,100\end{array}$