Problem:
The Greasy Spoon is considering a project with an intital cost of 525,000. The project will not produce any cash flows for the first 3 years. Starting in the fourth year, the project will produce cash inflows of $354,000 a year.
Required:
Question: What is the net present value of this project at a discount rate of 13%.
A. -152,232
B. -66,391
C. 67,333
D. 128,612
E. 239,602
Note: Show all workings.