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What is the npv of project

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Reference no: EM132118703

A firm has undertaken a feasibility study to evaluate a project that has the following estimated cashflows:

  • Increased sales to business of $160,000 for the next four years (starting in one year's time)
  • Increased costs of $40,000 for the next two years (starting in one year's time)
  • The initial capital expenditure required is $400,000.
  • The feasibility study cost $8,000 to conduct.
  • Amount borrowed to fund project is $280,000 with interest of 7.5% p.a. paid yearly.

If the firm is facing a discount rate of 10%, what is the NPV of this project?

Reference no: EM132118703

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