An investment that costs $60,000 will return $25,000 per year for five years. Determine the net present value of the investment if the required rate of return is 14 percent. (Ignore taxes.) Should the investment be undertaken?© BrainMass Inc. brainmass.com March 21, 2019, 9:13 pm ad1c9bdddf
NPV = PV of cash flows - initial investment
Cash flows are in the form of annuity. We use ...
The solution explains how to calculate the net present value of the investment and make the accept/reject decision.