The Following Details Are Provided by Volvox Foundry Company PV of $1

question 120

Multiple Choice

The following details are provided by Volvox Foundry Company: $$\begin{array} { | c | r | } \hline \text { Initial investment } & \$ 5,000,000 \\\hline \text { Discount rate } & 15 \% \\\hline \text { Yearly cash flows } & \\\hline 1 & \$ 1,256,000 \\\hline 2 & \$ 1,362,000 \\\hline 3 & \$ 2,420,000 \\\hline 4 & \$ 1,150,000 \\\hline\end{array}$$ PV of $1:
$$\begin{array} { | c | c | c | c | } \hline & 13 \% & 14 \% & 15 \% \\\hline 1 & 0.885 & 0.877 & 0.87 \\\hline 2 & 0.783 & 0.769 & 0.756 \\\hline 3 & 0.693 & 0.675 & 0.658 \\\hline 4 & 0.613 & 0.592 & 0.572 \\\hline\end{array}$$ What is the NPV of the project?

• A) $(627,448)
• B) $590,000
• C) $618,409
• D) $(594,941)