The following details are provided by Ferrous Foundry​ Company: Initial investment $ 5 comma 000 comma 000 Discount rate ​15% Yearly cash inflows 1 $ 1 comma 256 comma 000 2 $ 1 comma 358 comma 000 3 $ 2 comma 418 comma 000 4 $ 1 comma 160 comma 000 Present Value of​ $1: ​13% ​14% ​15% 1 0.885 0.877 0.87 2 0.783 0.769 0.756 3 0.693 0.675 0.658 4 0.613 0.592 0.572 What is the NPV of the​project?

Answer:

Present value of cash inflow

Year Present value of cash inflows
1 1256000*0.87 = 1092720
2 1358000*0.756= 1026648
3 2418000*.658 = 1591044
4 1160000*.572 = 663520
Total 4373932

Net present value = Present value of cash inflow-Present value of cash outflow

= 4373932-5000000

Net present value = -$626068