NPV: Net present value (NPV) is the method to evaluate the feasibility of the project. This method calculates the present value of cash inflows and outflows, and then calculates the net present value of the investment. A project should be accepted if it has a positive NPV. The formula to calculate the NPV is as follows: N P V = P r e s e n t v a l u e o f c a s h i n f l o w s – P r e s e n t v a l u e o f c a s h o u t f l o w s To calculate: The Net present value and decision for investment.

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Chapter 11, Problem 5ME

To determine

Concept introduction:

NPV:

Net present value (NPV) is the method to evaluate the feasibility of the project. This method calculates the present value of cash inflows and outflows, and then calculates the net present value of the investment. A project should be accepted if it has a positive NPV. The formula to calculate the NPV is as follows:

NPV = Present value of cash inflows – Present value of cash out flows

To calculate:

The Net present value and decision for investment.

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