Find the npv if reinvestment rate is given

Assignment Help Basic Statistics

Reference no: EM13133977

Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows:

Year Cash Flow
0 $-768,000
1 223,000
2 283,000
3 364,000
4 238,000

All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 3 percent. Anderson uses an 13 percent required return on this project. whats the NPV?

Reference no: EM13133977

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