how to calculate net present value on an investment
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Question
Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.)
|
Investment required in equipment |
$460,000 |
|
Annual cash inflows |
$77,000 |
|
Salvage value |
$0 |
|
Life of the investment |
16 years |
|
Discount rate |
12% |
The net present value on this investment is closest to:
a. $73,750
b. $76,998
c. $460,000
d. $77,000
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