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3. A proposed project requires an initial cash outlay of $749,000 for equipment and an additional cash outlay of $48,500 in y
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Answer #1

ANSWER:

Year cash flows PVF Discounted cash flows
0 -$749000 PVF(16,0) = 1 -$749000
1 -$48500 PVF(16%,1) = 0.86207 -$41810.40
2 $354000 PVF(16%,2) = 0.74316 $263078.64
3 $354000 PVF(16%,3) = 0.64066 $226793.64
4 $354000 PVF(16%,4) = 0.55229 $195510.66
NET PRESENT VALUE = -$105427.46
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