Determining the project net present value


Problem:

Empire Industries is considering adding a new product to their lineup. This product is expected to generate sales for four years after which time the product will be discontinued.

Requirement:

Question: What is the project's net present value if the firm wants to earn a 13 percent rate of return?

Year

0 -62,000

1 16.500

2 23,800

3 27,100

4 23,300

a. $3,505.52

b. $3,767.24

c. $4,312.65

d. $4,519.58

e. $4,902.71

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Finance Basics: Determining the project net present value
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