Building costs $400,000. Produces inflow after operating costs of $100,000 in year 1, $200,000 in year 2, and $300,000 in year 3. Opportunity cost of capital is 12%. What is the NPV? Thanks!
This really is the very simplest of NPV problems. I sincerely hope youare just trying to get someone else to do your homework, because if you're truly struggling with this problem you simply MUST go have a very honest talk with your academic advisor. This class is not working for you.
If i = 0.12, then v = 1/(1+i)
NPV = -400000 + 100000v + 200000v^2 + 300000v^3
There are several ways to add these up, but with only four terms, why bother.