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NPV of a proposed investment proposal

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(Ignore income taxes in this problem.) Chee Company has gathered the following data on a proposed investment project:
Investment required in equipment $250,000
Annual cash inflows $60,000
Salvage value $0
Life of the investment 6 years
Required rate of return 6%

The net present value on this investment is closest to:

$40,126
$46,278
$51,475
$45,020

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Solution Summary

Solution describes the steps for determining net present value of an investment proposal.

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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