Calculating Net Present Value (NPV) from cash flows
You are the finance manger of ABC Co. The Chief Executive is desirous of investing in a new venture. Preliminary findings and investigations have indicated that the venture might enhance the social corporate responsibility of the organization by creating employment.
However, whether the project would be profitable or not has not been determined. The Chief Executive has therefore requested your assistance in evaluating the project. You have been requested the evaluate the net present value (NPV), and Internal Rate of Return (IRR) of the project. The relevant rate is 9%. The cash flows are presented below:
Year Cash flow