![]() We would be indifferent to the project if the required return was equal to the IRR of the project, since at that required return the NPV is zero. The equation for the NPV of the project at a 19 percent required return is: ![]() NPV = -$84,000 + $17,800(PVIFA7%, 8) = $22,289.11Īt a 7 percent required return, the NPV is positive, so we would accept the project. Since the cash inflows are an annuity, the equation for the NPV of this project at a 7 percent required return is: The NPV of a project is the PV of the inflows minus the PV of the outflows.
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