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Homework answers / question archive / Schulman incorporated is considering investing in a project with the following expected cash flows: -920, 710, 1,560, 400
Schulman incorporated is considering investing in a project with the following expected cash flows: -920, 710, 1,560, 400. If Schulman's expected cost of capital is 0.30, what is the expected NPV of the project?
Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)
=710 /(1+ 0.30) +1560/ (1+ 0.30)^2+ 400/ (1+ 0.30)^3
=$ 1651.3
NPV= Present value of inflows-Present value of outflows
=( 1651.3- 920)
= $731.3
