Assignment:
Outflows
Initial Investment now: $235,000
End of year:
1: $150,000
2: $200,000
3: $250,000
4: $300,000
5: $350,000
Inflows
Initial investment now: $---
End of Year:
1: $200,000
2: $250,000
3. $300,000
4: $450,000
5: $500,000
Question 1. Compute the NPV for all these cash flows. This should be a single amount. Use a discount rate of 14%.
Question 2. Suppose the minimum desired rate was 12%. Without doing further calculations, determine whether the NPV is positive or negative. Explain.