Question

A project has the following cash flows: Year Cash Flows 0 -15,000 1 6,955 2 7,190...

A project has the following cash flows:

Year Cash Flows
0 -15,000
1 6,955
2 7,190
3 6,802

What is the NPV at a discount rate of zero percent?

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Answer #1

NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

CF CF CF3 *0+ (1+r)1*(1 + r)2 + (1+r)3

6955 7190 6802 NPV = - 15000 + 71L001+(1+00)2 + (1+0,0)3

NPV = -15000 + 6955 + 7190 +6802

NPV = 5947

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