The net present value of this investment is $19228
Table value Cash Present value
Flow Cash flow
1 0.870 $72000 $62640
2 0.756 $55000 $41580
3 0.658 $42000 $27636
4 0.572 $28000 $16016
Present value $147872
of net cash flow
(Less) Amount to be ($16700)
Net present value ($19228)
No, because the net present value indicates that the return on the proposal is less than the minimum rate of interest 15%.
Net present value- The difference between the present value of cash inflows and the present value of cash outflows over time is defined as net present value. The net present value (NPV) is a calculation used in capital budgeting and investment to determine the profitability of a proposed investment or project.
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