A developer is building a project that requires two cash investments in the amount of $5,000 each, one today and one in 3 years. In exactly 8 years, the project will then generate a cash flow of $15,000. If the firm can borrow external funds at 2.5%, what is the NPV for this project? O $2,668 O $2,711 O $2,788

A developer is building a project that requires two cash investments in the amount of $5,000 each, one today and one in 3 years. In exactly 8 years, the project will then generate a cash flow of $15,000. If the firm can borrow external funds at 2.5%, what is the NPV for this project? O $2,668 O $2,711 O $2,788

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A developer is building a project that
requires two cash investments in the
amount of $5,000 each, one today and
one in 3 years. In exactly 8 years, the
project will then generate a cash flow of
$15,000. If the firm can borrow external
funds at 2.5%, what is the NPV for this
project?
$2,668
$2,711
$2,788
O $2,823

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