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What is the NPV

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Question - Your CEO has asked you to evaluate whether the firm should launch a new product. Information provided by the consultant is as follows: $20,000 has been spent on doing a market survey, and this cost has been incurred regardless of whether the project is done or not.

Initial investment: $120,000 composed of $50,000 for the plant and $70,000 net working capital (NWC)

Profits of $31,000 every year for 3 years after which the project ends and NWC is recovered. No salvage value for the plant.

For a discount rate of 8%, what is the NPV?

Reference no: EM132557519

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