Imagine you are considering acquiring a company. You have received their financial statements, and have learned that they have annual cash flows of:
- Year 1: $10 Million
- Year 2: $8 Million
- Year 3: $14 Million
- Year 4: $17Million
Additionally, assume that in year 4 you will have a terminal cash flow of $250 Million, should you decide to sell the company at that time. If your discount rate is 15%.
What is the NPV of the project?