Lisa is pondering the construction and operation of a home-based cattery. She expects it will cost $35,000 to construct and will have a lifespan of four years before it collapses due to faulty construction and ammonia rot
Cash flows during those four glorious years are estimated as follows:
Year Inflow Outflow
1 6,000 3,000
2 7,000 3,300
3 8,000 3,600
4 9,000 3,900
If the interest rate is 5%, what is the present value of the cattery project?
A) -18,800
B) -20,790
C) -26,378
D) -47,168
B
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