Question

Сл This Question: 1 pt Consider the following two projects: Project Year 0 Year 1 Year 2 Year 3 Year 4 Cash Flow Cash Flow Cash Flow Cash Flow Cash Flow - 100 40 50 60 ΝΙΑ - 73 30 30 30 30 Discount Rate 0.17 0.17 A B The net present value (NPV) of project A is closest to: O A. 10.2 B. 8.2 O C. 20.4 OD. 9 Click to select your answer. Type here to search o

Answer 1

Answer:
Calculation of NPV
Formula will will use here
NPV =	Present value of Cash inflows - Initial cost
Initial cost =	100.00
Year	Cash Inflows	Present value factor @ 17%	Present value of cash inflows
1	40.00	0.85470	34.19
2	50.00	0.73051	36.53
3	60.00	0.62437	37.46
4	0.00	0.53365	0.00
Total	108.18
NPV
Present vallue of cash inflows	108.18
Less: Initial cost		100.00
NPV		8.18
So, the NPV of project A is closest to $8.20 (Answer)