Bloomfield Tires has assigned a discount rate of 14.4 percent to a new project that has an initial cost of $229,000 and cash flows of $74,300,$128,700,and $89,500 for Years 1 to 3,respectively.What is the net present value of this project?
A)$1,308.16
B)-$8,344.40
C)-$5,934.79
D)$5,127.10
E)-$4,899.03

Question

Quizplus · Accepted Answer

NPV = -$229,000 + $74,300/1.144 + $128,700/1.144² + $89,500/1.144³ = -$5,934.79

Bloomfield Tires Has Assigned a Discount Rate of 14