A publisher is deciding whether or not to invest in a new printer. The printer would...
A publisher is deciding whether or not to invest in a new printer. The printer would cost $500, and it would increase cash flows by $600 for the next two years. If the cost of capital is 10% then the net present value of the investment is
a. $1041.32 b. $541.32 c. $1090.91 d. $590.91
Homework Answers
- b. $541.32 .
Net present value can be defined as the present value of all Cash inflows and outflows of a particular project over a duration of time.
Net present value = 
((CFn /(1+in ))- initial
investment.
CFn : The cash flow in the nth period
i : rate of discounting
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