John is considering a project with cash inflows of $1,750, $1,850, $2,000, and $2,550 over the next four years, respectively.The relevant discount rate is 14 percent.What is the net present value of this project if it the start-up cost is $5,000?
A)$818.35
B)$947.56
C)-$600.00
D)$693.61
E)$379.75

Question

Quizplus · Accepted Answer

The correct answer is A. The net present value of the project is $818.35. The present value of the cash inflows is $7,818.35, and the present value of the start-up cost is $5,000. Therefore, the net present value is $7,818.35 - $5,000 = $818.35.

John Is Considering a Project with Cash Inflows of $1,750