A project manager is using the net present value method to make the final decision on which project to undertake.The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years.What is the NPV of a project that has cash flows as shown in the table? $$\begin{array} { | l | l | }
\hline \text { Year } & \text { Cash Flow } \
\hline 0 & - \$ 350,000 \
\hline 1 & \$ 50,000 \
\hline 2 & \$ 80,000 \
\hline 3 & \$ 100,000 \
\hline 4 & \$ 150,000 \
\hline
\end{array}$$
A) $4.955
B) $42,586
C) -$23,667
D) -$122,569

Question

A project manager is using the net present value method to make the final decision on which project to undertake.The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years.What is the NPV of a project that has cash flows as shown in the table? $$\begin{array} { | l | l | } 
\hline \text { Year } & \text { Cash Flow } \
\hline 0 & - \$ 350,000 \
\hline 1 & \$ 50,000 \
\hline 2 & \$ 80,000 \
\hline 3 & \$ 100,000 \
\hline 4 & \$ 150,000 \
\hline
\end{array}$$
A) $4.955
B) $42,586
C) -$23,667
D) -$122,569

Quizplus · Accepted Answer

The Answer of A project manager is using the net present value method to make the final decision on which project to undertake.The company has a 15% required rate of return and expects a 5% rate of inflation for the following four years.What is the NPV of a project that has cash flows as shown in the table? $$\begin{array} { | l | l | } 
\hline \text { Year } & \text { Cash Flow } \
\hline 0 & - \$ 350,000 \
\hline 1 & \$ 50,000 \
\hline 2 & \$ 80,000 \
\hline 3 & \$ 100,000 \
\hline 4 & \$ 150,000 \
\hline
\end{array}$$
A) $4.955
B) $42,586
C) -$23,667
D) -$122,569

A Project Manager Is Using the Net Present Value Method