Quantitative Methods Q56
56The incremental after-tax cash flows of a project are given below:
| Year | 0 | 1 | 2 | 3 | 4 |
| Cash flow (€) | -50,000 | 25,000 | 20,000 | 10,000 | 3,000 |
Using 12 percent as the discount rate, the NPV (in €) of the project is closest to:
- Option : A
- Explanation : Enter the given cash flows and the given discount rate into a financial calculator and solve for NPV. CF0 = –50,000, CF1 = 25,000, CF2 = 20,000, CF3 = 10,000, CF4 = 3,000, i = 12%. Compute PV. The NPV is –2,710.
