XYZ will add a new product that is expected to generate the

XYZ will add a new product that is expected to generate the following cash flows. What is the NPV if the firm wants to earn a 13 percentage rate of return? 3,506 3,767 4,313 4,520 4,903

Solution

Answer: 3) $4313

Calculation of NPV:

Discount rate	13%
Year	cash Flows ($)
0	-62000
1	16500
2	23800
3	27100
4	23300
NPV	$4,313