calculate the npv for 5 year project
NPV for 5-Year Project
For this exercise, you need to calculate the NPV for a project described below. Make sure you study the “Numeric Models: Profit/Profitability” section in Chapter 2 of the textbook before trying to solve the problem. You are the manager of a construction company with a five-year project that has a projected net cash flow of $25,000, $35,000, $45,000, $20,000 and $15,000. Implementation costs are $50,000. The company has a required rate of return of 20%. Compute the discounted cash flow and determine the NPV. Include your calculations in an appendix after the references page. Include information on what projected net cash flow, discounted cash flow and NPV are, why they are useful in project selection, and, given the numbers, if this example project meets the company requirements, and why or why not.
Optional Resources
Review any of the following videos for additional information on how to calculate NPV:
- Calculate the Net Present Value of an Investment (Links to an external site.)
- Introduce Net Present Value and Internal Rate of Return (Links to an external site.)
https://www.linkedin.com/learning/excel-analyzing-and-visualizing-cash-flows/welcome?u=2245842
https://www.linkedin.com/learning/excel-analyzing-and-visualizing-cash-flows/welcome?u=2245842
Submission Requirements
Prepare a 3- to 4-page paper (not including the required title and reference pages and the appendix) detailing and compiling the specifics to items above.
Support your paper with a minimum of two current (published in the most recent five years) scholarly sources
Be clear, concise, and focused. Be sure to organize your writing properly and include an introduction; headings/subheadings for the body of your work; analysis and recommendations (if applicable); a conclusion; list of references; and an appendix.