A company is considering an iron ore extraction project that requires an initial investment of $512,000 and will yield annual cash inflows of $156,000 for four years
The company's discount rate is 9%. What is the NPV of the project?
Present value of an ordinary annuity of $1:
8% 9% 10%
1 0.926 0.917 0.909
2 1.783 1.759 1.736
3 2.577 2.531 2.487
4 3.312 3.24 3.17
5 3.993 3.89 3.791
6 4.623 4.486 4.355
7 5.206 5.033 4.868
8 5.747 5.535 5.335
9 6.247 5.995 5.759
10 6.71 6.418 6.145
A) $6,560
B) $(102,400 )
C) $102,400
D) $(6,560 )
D .
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