Calculate the projects net present value


Problem: Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as follows:

---- Net Cash Flows ----
Project Alpha

Initial Cost at T-0 (Now) ($10,000)
cash inflow at the end of year 1 6,000
cash inflow at the end of year 2 4,000
cash inflow at the end of year 3 2,000

Q1. Calculate the project's Net Present Value (NPV), assuming your required rate of return is 10%

Q2. On the basis of your analysis in part (1), should the project be accepted or rejected?

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Finance Basics: Calculate the projects net present value
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