Gators, Inc
cybacatxComputing net present value. Gators, Inc., is considering a project that requires an initial investment of $2,000,000 and that will generate the following cash inflows for the next five years:
Year | Cash Inflow at End of Year |
1 ............................................................................................................................................ | $300,000 |
2 ............................................................................................................................................ | 400,000 |
3 ............................................................................................................................................ | 800,000 |
4 ............................................................................................................................................ | 800,000 |
5 ............................................................................................................................................ | 600,000 |
Calculate the net present value of this project if Gator’s cost of capital is
a. 12 percent.
b. 20 percent.
10 years ago
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