What is the net present value of the business venture


A new business opportunity has presented itself. The business venture is expected to last for ten years. For the first four years, negative cash flows of $25,000 per year are expected at the end of each year. No net cash flow is expected at the end of year five. A positive cash flow of $33,000 is anticipated at the end of year six. A positive cash flow of $37,000 is expected at the end of years seven through ten. At the end of year ten, the business will be sold for $234,000. What is the present value of all of the future cash flows, assuming a 17.5% annual cost of capital? HINT: Use a timeline. If the business venture will cost you $179,000 to establish today, what is the net present value of the business venture? Should you pursue it? explain how does PVF come from.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What is the net present value of the business venture
Reference No:- TGS02626724

Expected delivery within 24 Hours