a project has the following cash flows 0 1 2 3 4 500 14000 2

a project has the following cash flows: 0 1 2 3 4 ($500) $140.00 $200. $290.00 What is the project NPV if the interest rate is $6%

Solution

As only three cash inflows are given so I am calculating with that only and assuming the cash inflow of year 4 is 0 Statement showing Cash flows Particulars Time PVf 6% Amount($) PV Cash Outflows                -              1.00                 -500.00                 -500.00 PV of Cash outflows = PVCO                 -500.00 Cash inflows           1.00       0.9434                   140.00                   132.08 Cash inflows           2.00       0.8900                   200.00                   178.00 Cash inflows           3.00       0.8396                   290.00                   243.49 Cash inflows           4.00       0.7921                            -                              -   PV of Cash Inflows =PVCI                   553.56 NPV= PVCI - PVCO                     53.56 NPV is $53.56