Required rate of return for projects

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Calculate the NPV of a project that has an outlay of $200,000 and has annual net cash flows of $70000 per year over 9 years. The project has a salvage value (disposal value) of 10% of its original value. The required rate of return for projects of similar risk is 0.1.

Note that the rate of return is quoted as a decimal, e.g. 12% p.a. is written as .12 in the question above. Your answer must be accurate to the nearest dollar. Do not enter the $ sign when entering your answer. If your NPV is negative enter a minus sign before typing your answer, e.g. -2345.

Reference no: EM132484804

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