Homework Answers
Below is the cash flow and NPV calculation for the above microwave:
| Year | Cash Flow | Present Value of Cash Flow (Cash Flow/1.04^year)) |
| 0 | (159.00) | (159.00) |
| 1 | 68.00 | 65.38 |
| 2 | 68.00 | 62.87 |
| 3 | 68.00 | 60.45 |
| 4 | 68.00 | 58.13 |
| 5 | 68.00 | 55.89 |
| Total (NPV) | 143.72 |
Hence, net present value =$143.72
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