How to determine the net present value

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Reference no: EM132537460

Heedy Inc. is considering a capital investment proposal that costs $460,000 and has an estimated life of four years, and no residual value. The estimated net cash flows are as follows:

Year Net Cash Flow

1 $195,000

2 160,000

3 120,000

4 80,000

Question 1: The minimum desired rate of return for net present value analysis is 10%. The present value of $1 at compound interest rates of 10% for 1, 2, 3, and 4 years is 0.909, 0.826, 0.751, and 0.683, respectively. Determine the net present value. Enter negative values as negative numbers.

Reference no: EM132537460

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