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Project NPV

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9. Sorenson Stores is considering a project that has the following cash flows:

Year Cash Flows (end of period)

1 $2,000

2 $3,000

3 $3,000

4 $1,500

The project has a payback of 2.5 years, and the firm's cost of capital is 12%. What is the project's NPV?

$577.68
$765.91
$1,049.80
$2,761.32
$3,765.91

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Solution Summary

The solution explains how to calculate the project NPV given the payback period and discounting rate

Solution Preview

Payback period is the time taken to recover the initial investment. Using the cash flows and the payback ...

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