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7 years ago
A company is considering an iron ore extraction project that requires an initial investment of $512,000 and will yield annual cash inflows of $156,000 for four years. The company's discount rate is 9%. What is the NPV of the project?
Present value of an ordinary annuity of $1:

   8%   9%   10%
1   0.926   0.917   0.909
2   1.783   1.759   1.736
3   2.577   2.531   2.487
4   3.312   3.24   3.17
5   3.993   3.89   3.791
6   4.623   4.486   4.355
7   5.206   5.033   4.868
8   5.747   5.535   5.335
9   6.247   5.995   5.759
10   6.71   6.418   6.145

A) $(102,400)
B) $6,560
C) $(6,560)
D) $102,400
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
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Deprecated Author
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#2
7 years ago
This was certainly a tough question, loving the expertise
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#3
3 years ago
Thank you!
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