Curtis is considering a project with cash inflows of $918, $867, $528, and $310 over the

next four years, respectively. The relevant discount rate is 11 percent. What

is the net present value of this project if it the start up cost is $2,100?

A) $20.98

B) $46.48

C) $52.14

D) $74.22

E) $80.81

Question

Squirt

Business

14 November, 11:21

Curtis is considering a project with cash inflows of $918, $867, $528, and $310 over the

next four years, respectively. The relevant discount rate is 11 percent. What

is the net present value of this project if it the start up cost is $2,100?

A) $20.98

B) $46.48

C) $52.14

D) $74.22

E) $80.81

+2

Answers (1)

Know the Answer?

Virginia Russo · Answer 1

A) $20.98

Explanation:

First, find the PV of each cash inflow;

PV (of CF1) = 918 / (1.11) = 827.0270

PV (of CF2) = 867 / (1.11²) = 703.6766

PV (of CF3) = 528 / (1.11³) = 386.0690

PV (of CF4) = 310 / (1.11^4) = 204.2066

Sum up the PVs;

= 827.0270 + 703.6766 + 386.0690 + 204.2066

= $2,120.9792

NPV = - initial investment + SUM of PVs of future cash inflows

= - 2,100 + 2,120.9792

= $20.98

Curtis is considering a project with cash inflows of $918, $867, $528, and $310 over thenext four years, respectively. The relevant discount rate is 11 percent. Whatis the net present value of this project if it the start up cost is $2,100?A) $20.98B) $46.48C) $52.14D) $74.22E) $80.81

Curtis is considering a project with cash inflows of $918, $867, $528, and $310 over the

next four years, respectively. The relevant discount rate is 11 percent. What

is the net present value of this project if it the start up cost is $2,100?

A) $20.98

B) $46.48

C) $52.14

D) $74.22

E) $80.81