Weir Inc. is considering a project that contributes $12,000 at the end of the first year and $7,000 at the end of the second year? The initial cost of the project is $12,000 (negative cash flow!). What is the net present value of the project at a 10% discount rate? Hint: Net present value is the sum of all present and future cash flows but present cash flows at t = 0 are not discounted; all other cash flows occurring after t = 0 must be discounted.
$ 4,958.68
$ 4,694.21
$ 4,429.75
$ 4,165.29
$ 5,223.14