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Calculate Net Present Value (NPV)

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Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as flows:
Net Cash Flows
Project Alpha
Initial Cost at T â?" 0(Now ($10,000)
Cash inflow at the end of year 1 $6,000
Cash inflow at the end of year 2 $4,000
Cash inflow at the end of year 3 $2,000
Calculate project Alphas Net Present Value (NPV), assuming your firms required rate of return is 10%.

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Solution Summary

The solution calculates the net present value (NPV).

Solution provided by:
Chidi Ngene, M. Sc.
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
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