Ms. Chanel Tobias, an ambitious young financial analyst working for McCain and Schumm Financial Solutions,Ltd., is attempting to reconstruct a project analysis of a co-worker who was fired for flunking FI 3300. She has found the following information:
The IRR is 14%.
The project life is 6 years.
The initial cost is $16,000.
In years 1,2,3,and 4 you will receive cash inflows of $3,000.
You know the cash flows in years 5 and 6 are equivalent, but the amount is not on file.
The appropriate discount rate is 10%.
What is the NPV of the project?
a. $ 2,335.25
b. $ 5,750.35
c. -$1,250.00
d. $ 2,000.00
e. None of the above