What is the Net Present Value (NPV) for the cash flows provided in the table below?

Note: The negative cash flow for year 0 is the initial investment for the project. The required rate of return is 8% and the internal rate of return is 9.70%.
Year Cash Flow
0 -$100,000
1 $40,000
2 $40,000
3 $40,000

A) $0.00
B) $100,000.00
C) $3,083.88
D) -$103,083.88


C
Explanation: C) Via Calculator: N = 3, I = 8, PMT = 40,000, FV = 0, PV = $103,083.88, NPV = PV - Initial investment = $103,083.88 - $100,000 = $3,083.88.

Business

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