Тестовое задание
Salem Co is considering a six-year project that produces annual net cash inows of $420,000 for the rst ve years and a net cash inow of $100,000 at the end of the sixth year. The project will require an initial investment of $1,800,000. Salem's cost of capital is 10%. What is the net present value for this project? Choose the closest number.
Let's calculate NPV according to the standard formula:
NPV = -1{,}800{,}000 + \frac{420{,}000}{1.1} + \frac{420{,}000}{(1.1)^2} + \frac{420{,}000}{(1.1)^3} + \frac{420{,}000}{(1.1)^4} + \frac{420{,}000}{(1.1)^5} + \frac{100{,}000}{(1.1)^5} \approx -151{,}422