Park co. is considering an investment that requires immediate payment of $34,000 and provides expected cash inflows of $11,800 annually for four years. if park co. requires a 10% return on its investments. 1-a what is the net present value of this investment? (fv of $1, pv of $1, fva of $1 and pva of $1) (use appropriate factor(s) from the tables provided.)

NPV =  3,404.41

Explanation:

We will calculate the net present value doing:

NPV =  present value of the cash flow   - investment

Investment = 34,000

Now we need to discount each cash flow at the given rate.

For that, we will treat the cash flow as an annuity of 11,800 for 4 year at 10% rate:

C11800

time4

rate0.1

PV$37,404.41

NPV =  present value of the cash flow   - investment

NPV =       37,404.41 - 34,000 = 3,404.41

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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