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[The following information applies to the questions displayed below.) 7.69 points Park Co. is considering an investment that requires immediate payment of $28,065 and provides expected cash inflows of $8,100 annually for four years. If Park Co. requires a 5% return on its investments. eBook QS 25-2 Net present value LO P3 Hint Print 1-a. What is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) Amount x PV Factor = Present Value $ 8,100 x 3.5460 = $ Cash Flow Select Chart Annual cash flow Present Value of an Annuity of 1 Immediate cash outflows Net present value 28,723 28,065
Net Present Value= Present value of cash inflows - initial investment
Present value of cash inflows = 8100 x present value of cash inflows @5% in 4years
Present value of cash inflows = 8100 x 3.546
= 28722.6
Net Present Value = 28722.6 - 28065
= 657.6
Hence, NPV is positive so company can accept the project.
