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What is the net present value or npv of the project

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Bill plans to open a do-it-yourself taco and margarita station in a hotel main lobby for guests who have to wait a long time to check in. The equipment will cost $50,000. Bill expects the net cash inflows to be $15,000 annually for 8 years and then sell the equipment for $2,500 at the end of year 8. He will then retire to the beaches of Jamaica.

Problem a) What is the Net Present Value (NPV) of this project with a 10% discount rate? Should we accept/rejectthis project?

Option 1: $131,084.1370 / Reject

Option 2: $31,084.1370 / Reject

Option 3: $131,190.1614 / Accept

Option 4: $31,190.1614 / Accept

Reference no: EM132684006

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