With a discount rate of 8 what is the net present value npv


A project costs $100,000 today to get started and will produce cash flows of $0, $10,000, $20,000 in years 1, 2, 3. After year 3 the cash flows will increase by 3% (i.e. the year-4 cash flow is $20,600) forever. With a discount rate of 8%, what is the net present value (NPV) of the project?

Options:

  1. $251,509
  2. $351,509
  3. $292,936
  4. $342,936
  5. $242,936

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Dissertation: With a discount rate of 8 what is the net present value npv
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