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    NPV Calculation

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    A project requires a $5000 cash investment at the beginning of year 1. This project will produce a $2000 cash income at the end of each of years 1-4. Using appropriate annual discount factors set up a simple table showing data and a calculation of the NPV of this cash flow discounted at 10%.

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    Solution Preview

    ($5,000) $2,000 $2,000 $2,000 $2,000
    NPV = $1,339.73 ...

    Solution Summary

    Net Present Value of an investment project is calculated.