The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan.

-Calculate the total net present value for the project using a discount rate of 12%.
A)$5,163.82
B)$75,000.00
C)$9,078.37
D)$51,000.00
E)Do not have enough information to compute

Question

The product design costs are $75,000. The following table shows the projected cash in-flows. Assume a 4-year lifespan.
 
-Calculate the total net present value for the project using a discount rate of 12%.
A)$5,163.82 
B)$75,000.00 
C)$9,078.37 
D)$51,000.00 
E)Do not have enough information to compute

Quizplus · Accepted Answer

The correct answer is A because the net present value is calculated by taking the sum of the present values of all future cash flows, discounted back to the present at a given discount rate. In this case, the discount rate is 12%, and the net present value is $5,163.82.

The Product Design Costs Are $75,000