Problem: Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as follows:
---- Net Cash Flows ----
Project Alpha
Initial Cost at T-0 (Now) ($10,000)
cash inflow at the end of year 1 6,000
cash inflow at the end of year 2 4,000
cash inflow at the end of year 3 2,000
Q1. Calculate the project's Net Present Value (NPV), assuming your required rate of return is 10%
Q2. On the basis of your analysis in part a, should the project be accepted or rejected?