The Sisyphean Company is planning on investing in a new project. This will involve the purchase...

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Finance

The Sisyphean Company is planning on investing in a new project.This will involve the purchase of some new machinery costing?$450,000. The Sisyphean Company expects cash inflows from thisproject as detailed? below:
Year One
Year Two
Year Three
Year Four
?$200,000
?$225,000
?$275,000
?$200,000
The appropriate discount rate for this project is? 16%.
The NPV for this project is closest? to:

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3.7 Ratings (685 Votes)

The NPV for this project is closest? to $176,264.53
Statement showing Cash flows
Particulars	Time	PVf 16%	Amount	PV
Cash Outflows	-	1.00	(450,000.00)	(450,000.00)
PV of Cash outflows = PVCO				(450,000.00)
Cash inflows	1.00	0.8621	200,000.00	172,413.79
Cash inflows	2.00	0.7432	225,000.00	167,211.65
Cash inflows	3.00	0.6407	275,000.00	176,180.86
Cash inflows	4.00	0.5523	200,000.00	110,458.22
PV of Cash Inflows =PVCI				626,264.53
NPV= PVCI - PVCO				176,264.53

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Transcribed Image Text

The Sisyphean Company is planning on investing in a new project.This will involve the purchase of some new machinery costing?$450,000. The Sisyphean Company expects cash inflows from thisproject as detailed? below:Year OneYear TwoYear ThreeYear Four?$200,000?$225,000?$275,000?$200,000The appropriate discount rate for this project is? 16%.The NPV for this project is closest? to:

Year One	Year Two	Year Three	Year Four
?$200,000	?$225,000	?$275,000	?$200,000