Round to 2 decimal placesHomework Answers
Year Cash Flow PVF / AF @14% Discounted Cash Flow
0 ($51,463) 1 ($51,463)
1-10 $10,620 5.2161 $55,395
1-10 ($2460) 5.2161 ($12,832)
($4,473*55%)
NPV = Discounted Cash Inflows - Discounted Cash Outflows
= $55,395 - $51,463-$12,832
= - 8900
Since NPV is negave , it is advisable not to open bakery.
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