The project would require an initial investment in equipment

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What is the NPV of project A? The project would require an initial investment in equipment of 70,000 dollars and would last for either 3 years or 4 years (the date when the project ends will not be known until it happens and that will be when the equipment stops working in either3years from today or 4 years from today). Annual operating cash flows of 21, 700 dollars per year are expected each year until the project ends in either 3 years or 4 years. In 1 year, the project is expected to have an after-tax terminal value of 45, 286 dollars. The cost of capital for this project is 8.18 percent. Number.

Reference no: EM131549044

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