The initial cost of the project is 20,000 EUR. You assume that you will be able to generate cash inflows (for instance through subscriptions) from this project in the years 1-3 of 10,000 EUR each. The target interest rate is 10% per annum.. Write the formula and calculate NPV.

The initial cost of the project is 20,000 EUR. You assume that you will be able to generate cash inflows (for instance through subscriptions) from this project in the years 1-3 of 10,000 EUR each. The target interest rate is 10% per annum.. Write the formula and calculate NPV.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 28P

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. The initial cost of the project is 20,000 EUR. You assume that you will be able to generate cash inflows (for instance through subscriptions) from this project in the years 1-3 of 10,000 EUR each. The target interest rate is 10% per annum.. Write the formula and calculate NPV. Justify the result.

Definition Definition Transfer of funds into a company by any third party, which may happen due to any operational, investing, and financing activities. The cash inflow includes payments made by customers or investments made by the investors into the company by purchasing its equity.

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