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Should corp pursue the project

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Problem 1: Heat Corp. is considering committing $4,500,000 to a project that will generate the following cash flows in the 5 years. Calculate the NPV of the project. The cost of capital for Heat Corp. is approximately 17.5%. Should Corp. pursue the project? Explain your answer.

Year 1                   Year 2               Year 3            Year 4                   Year 5
$600,000           $900,000           $1,200,000     $1,200,000          $3,000,000

 

Reference no: EM133002682

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