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Million investment in a new venture called project X.

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First, Forecast the cash flows generated by project X over its economic life. Second, determine the appropriate opportunity cost of capital(r).
this should reflect the both the time value of money and the risk involved in project X. Third, use this opportunity cost of capital to discount the project's future cash flows, the sum of the discount cash flows is called present value(PV), Forth, calculate net present value(NPV) by subtracting the $1million investment from PV.

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The expert examines Million investments in a new venture called project X.

Solution provided by:
Robert Reinhart, MBA
Education
  • MBA, Merage School of Business, Univ of Cal, Irvine
  • BA, Univ of Cal, Irvine
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