A $550,000 Capital Investment Proposal Has an Estimated Life of 4

question 5

Short Answer

A $550,000 capital investment proposal has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows:
The minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is 0.893, 0.797, 0.712, and 0.636, respectively.
Determine the net present value.

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Definitions:

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