Question

Fimbrez Corporation has provided the following data concerning an investment project that it is considering:

Initial investment	$240,000
Annual cash flow	$133,000	per year
Expected life of the project	4	years
Discount rate	13%

Use Excel or financial calculator to solve.

The net present value of the project is closest to: (Round final answers to the nearest dollar amount.)

rev: 05_13_2016_QC_CS-51636

$(107,000)

$155,542

$240,000

$(155,542)

Answer 1

Year	Amount ($)	Discounting Factor	Present Value
1	1,33,000	0.885	1,17,705
2	1,33,000	0.783	1,04,139
3	1,33,000	0.693	92,169
4	1,33,000	0.613	81,529
		Total	3,95,542
	Less	Initial Investment	2,40,000
		Net Present Value	$1,55,542