Aproject will produce cash inflows of $5,400 a year for 3 years with a final cash inflow of $2,400 in year 4. the project's initial cost is $13,400. what is the net present value if the required rate of return is 14.2 percent

Net Present Value (NPV) is 506

Explanation:

See document attached.  To get the net present value,  we make a cash flow in excel.  

At moment 0 we have the investment cost , in this case $13,400. From period 1 to period 4, we have different incomes. Then, we calculate the Net cash flow that is the difference between benefits and cost.

To get  net present value,  we use VNA formula.  

=VNA(required rate of return; Net cash flow from moment 1 to moment 4 )+Net cash flow at moment 0

answernet income for 2017 will be greater if the inventory quantity declines;