The present value of a project is 80000 The cost today of th

The present value of a project is $80,000. The cost today of the project is $70,000 and the required market interest rate of return is 12 percent. How much does your wealth change if you undertake this project? Also, please show how to entering number in financial calculator HP 10bII+

Solution

Answer)

Present value of net cash flow- Cost of project = 71428.57 - 70,000 =1428.57

So the wealth will change by $ 1428.57 if we undertake the project.