Hibiscus HQ is considering a project with an initial cost of $320,800. The project will not produce any cash flows for the first two years. Starting in Year 3, the project will produce cash inflows of $194,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 17.4 percent. What is the project's net present value? -$14,586.20 O $-11.793.26 $3,285.94 O-$16,930.76 O $-21,784.92
Hibiscus HQ is considering a project with an initial cost of $320,800. The project will not produce any cash flows for the first two years. Starting in Year 3, the project will produce cash inflows of $194,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 17.4 percent. What is the project's net present value? -$14,586.20 O $-11.793.26 $3,285.94 O-$16,930.76 O $-21,784.92
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Hibiscus HQ is considering a project with an initial cost of $320,800. The project will not produce any cash flows for the first
two years. Starting in Year 3, the project will produce cash inflows of $194,000 a year for three years. This project is risky, so the
firm has assigned it a discount rate of 17.4 percent. What is the project's net present value?
-$14,586.20
$-11.793.26
$3,285.94
-$16,930.76
$-21,784.92](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff227e5a0-b6c9-4bab-8d89-dca48a8f1ccc%2F75a9f6c5-75e0-4421-9fb4-dde36685268d%2Fzc1vtmc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Hibiscus HQ is considering a project with an initial cost of $320,800. The project will not produce any cash flows for the first
two years. Starting in Year 3, the project will produce cash inflows of $194,000 a year for three years. This project is risky, so the
firm has assigned it a discount rate of 17.4 percent. What is the project's net present value?
-$14,586.20
$-11.793.26
$3,285.94
-$16,930.76
$-21,784.92
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