5 Compute the NPV for Project X with the cash flows shown as

5. Compute the NPV for Project X with the cash flows shown as follows if the appropriate cost of capital is 9 percent.

Time: 0 1 2 3 4 5 Cash flow: ?1,000 ?75 100 100 0 2,000

A. -$639.96

B. 360.04

C. 392.44

D. 486.29

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=100/1.09^2+100/1.09^3+2000/1.09^5

=$1461.24912

Present value of outflows=1000+75/1.09

=$1068.807339

NPV=Present value of inflows-Present value of outflows

=$1461.24912-$1068.807339

=$392.44(Approx)