A project promises to offer monthly, stable cash flows for 7 years of $1,500 per month. The stated annual discount rate for these cash flows is 9% per year. The investment amount for the project is an initial, on-time payment of $10,000 due immediately.
What is the NPV of the project?
HINT: Use the “effective periodic rate” conversion formula to calculate the effective monthly interest rate: The interest is compounded monthly, or 12 times per year.