your firm is considering an investment that will cost $920 000 today, what is the investment's net present value

The correct option is d. $192,369.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Your firm is considering an investment that will cost $920,000 today. the investment will produce cash flows of $450,000 in year 1, $270,000 in years 2 through 4, and $200,000 in year 5. the discount rate that your firm uses for projects of this type is 11.25%. what is the investments net present value?

a. $378, 458

b. $540,000

c. $112,583

d. $192,369

The answer to the question is now provided as follows:

Net present value (NPV) is calculated by deducting the present value of cash outflows from the present value of cash inflows over a period of time.

Note: See the attached excel file for the calculation of the net present value (NPV).

From the attached excel file, we have:

r = Discount rate = 11.25%

Net present value (NPV) = 192,369

Therefore, the correct option is d. $192,369.

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