Problem:
Fitchminster Armored Car can purchase a new vehicle for $200,000 that will provide annual net cash flow over the next five years of $40,000, $45,000, $50,000, $55,000, $60,000. The salvage value of the vehicle will be $25,000. Assume that the vehicle is sold at the end of year 5.
Required:
Question: Calculate the NPV of the ambulance if the required rate of return is 9%.
Note: Please explain comprehensively and give step by step solution.