A factory costs $400,000. It will produce an inflow after operating costs of $100,000 in year 1, $200,000 in year 2, and $300,000 in year 3. The opportunity cost of capital is 12%. Calculate the npv.
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Answer:
I will tell the answer first let me think .
Answered by
0
Answer:
62,258.5637287
Explanation:
take the pv of all the cashflows : Pv= Cf(1+r)^1+cf2(1+r)^2+cf3(1+r)^3 = 100000(1+0.12)^1+200000(1+0.12)^2+300000(1+0.12)^3 .
= 462258.56373
NPV = Initial investment - sum of all pv cf
= 462,258.56373 - 400,000
= $62,258.563729
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