CHAPTER 6: DISCOUNTING FUTURE BENEFITS AND COSTS

11. The NPV of a project is the PV of the outflows minus the PV of the inflows. At a zero discount rate (and only at a zero discount rate), the cash flows can be added together across time. So, the NPV of the project at a zero percent required return is: NPV = –$19,500 + 9,800 + 10,300 + 8,600 = $9,200. The NPV at a 10 percent required return is: ................
................