A Project Initially Costs $40,500 and Will Not Produce Any

A project initially costs $40,500 and will not produce any cash flows for the first 2 years.Starting in Year 3,it will produce cash flows of $34,500 a year for 2 years.In Year 6,the project will end and should produce a final cash inflow of $12,000.What is the net present value of this project if the required rate of return is 18.5 percent?

A) $2,474.76
B) $2,063.19
C) $1,935.56
D) $1,865.95
E) $2,647.76

Correct Answer:

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