General Studies · Financial Management - NPV
A company requires an immediate initial outlay of $800,000 for a project. It generates annual net cash inflows of $220,000 for the first 3 years. Starting from Year 4, the inflows decrease to $150,000 per year and continue at that level in perpetuity. If the cost of capital is 12%, what is the Net Present Value (NPV) of this investment (to the nearest $1,000)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$525,000
- 2$450,000
- 3$316,000✓
- 4$295,000
Correct answer
$316,000
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