Practice Question
A company has net cash flows of $150,000, $250,000, and $350,000 over three years. What is the NPV if the discount rate is 10%?
Answer +
B
Step-by-step solutions +
To calculate **Net Present Value (NPV)**:
= 136,364 + 206,612 + 263,302 = **~$606,278**
*(Rounded to ~$600,000 as per multiple-choice answer)*
Final Answer: B
NPV = (150,000 / 1.1) + (250,000 / 1.1²) + (350,000 / 1.1³)
= 136,364 + 206,612 + 263,302 = **~$606,278**
*(Rounded to ~$600,000 as per multiple-choice answer)*
Final Answer: B