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QUESTION
1. What is the NPV of an investment that costs $150,000 and returns $80,000 in the first year but then declines by 8%/year with the final cash flow
1. What is the NPV of an investment that costs $150,000 and returns $80,000 in the first year but then declines by 8%/year with the final cash flow coming in year 5? Assume a discount rate of 9.4%.
a) $250,000
b) $366,400
c) $116,400
d) $190,900
e) $40,900
