Problem:
A proposed project requires an initial cash outlay of $849,000 for equipment and an additional cash outlay of $48,500 in year 1 to cover operating costs. During years 2 through 4, the project will generate cash inflows of $354,000 a year.
Required:
Question: What is the net present value of this project at a discount rate of 13 percent?
- -$152,232
- -$66,391
- $67,333
- $128,612
- $239,602
Note: Please provide equation and explain comprehensively and give step by step solution.