Park co. is considering an investment that requires immediate payment of $34,000 and provides expected cash inflows of $11,800 annually for four years. if park co. requires a 10% return on its investments. 1-a what is the net present value of this investment? (fv of $1, pv of $1, fva of $1 and pva of $1) (use appropriate factor(s) from the tables provided.)

NPV =  3,404.41

Explanation:

We will calculate the net present value doing:

NPV =  present value of the cash flow   - investment

Investment = 34,000

Now we need to discount each cash flow at the given rate.

For that, we will treat the cash flow as an annuity of 11,800 for 4 year at 10% rate:

C11800

time4

rate0.1

PV$37,404.41

NPV =  present value of the cash flow   - investment

NPV =       37,404.41 - 34,000 = 3,404.41

a) both were commissioned explorers

3rd the reason why is because of management and leadership