Citrus Company is considering a project that has estimated annual net cash flows

Question

Citrus Company is considering a project that has estimated annual net cash flows of $38,340 for four years and is estimated to cost $180,000. Citrus's cost of capital is 9 percent. Determine the net present value of the project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round your final answer to 2 decimal places.) Net Present Value Based on NPV, determine whether project is acceptable to Citrus

Explanation / Answer

Net present value = Present value of cash inflow-Present value of cash outflow

= (38340*3.23972)-180000

Net present value = -55789.14

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