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A Project's Net Present Value Based on Require Rate of Return

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A project is expected to create operating cash flows of $22,500 a year for three years. The initial cost of the fixed assets is $50,000. These assets will be worthless at the end of the project. An additional $3,000 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 10 percent?

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Solution Summary

This solution calculates a project's net present value when it is expected to operate cash flows of $22,500 per year for three years.

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