A firm has undertaken a feasibility study to evaluate a project that has the following estimated cashflows:
Increased sales to business of $140,000 for the next 5 years (starting in one year's time)
Increased costs of $20,000 for the next two years (starting in one year's time)
The initial capital expenditure required is $100,000.
The study cost $10,000 to conduct.
-Amount borrowed to fund project is $200,000 with interest of 8% pa paid yearly.
If the firm is facing a discount rate of 10%, what is the NPV of this project?
a. 506,155
b. 395,999
c. 455,420
d. 516,155