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You are considering starting an air delivery business. Your will need to spend $117,000 today to purchase the airplane and ot

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You are considering starting an air delivery business. Your will need to spend $117,000 today to purchase the airplane and ot

Present Value of Cash Inflows = Cash Flow (1 + r) Cash Flow2 + (1+r)2 + - - - - Cash Flown (1 + r)

= 17000 17000 17000 17000 17000 (1 +0.14) (1 +0.14)2 (1 +0.14)3 (1 + 0.14) (1 +0.14)5 10000 10000 10000 10000 + 102000 (1 +

= 105313.2

NPV = Present Value of Cash Inflow - Present value of Cash outflow

NPV = 105313.2 - 117000 = - $11,686.80

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