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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
19.  Computing net present value. Gators, Inc., is considering a project that requires an initial investment of $2,000,000 and that will generate the following cash inflows for the next five years:
Â
|
Year |
Cash Inflow at End of  Year |
|
1Â Â Â Â ............................................................................................................................................ |
$300,000 |
|
2Â Â Â Â ............................................................................................................................................ |
400,000 |
|
3Â Â Â Â ............................................................................................................................................ |
800,000 |
|
4Â Â Â Â ............................................................................................................................................ |
800,000 |
|
5Â Â Â Â ............................................................................................................................................ |
600,000 |
Calculate the net present value of this project if Gator’s cost of capital is
a.   12 percent.
b.   20 percent.
Â
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