Ashley Products Inc. is considering a new project with the following cash flows. The discount rate...

Question

Question

Ashley Products Inc. is considering a new project with the following cash flows. The discount rate is 10% for the cash flows.

Answer 1

Answer #1

Answer is $912.85

Cash Flows:
Year 0 = -$2,000
Year 1 = $0
Year 2 = $0
Year 3 = $3,877

Discount Rate = 10%

NPV = -$2,000 + $3,877/1.10^3
NPV = -$2,000 + $2,912.85
NPV = $912.85

So, NPV of the project is $912.85

Answer 2

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