A company has a minimum required rate of return of 9% and is considering investing in a project that costs $350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years. the net present value of this project is

The net present value of the project can be calculated as follows:

NPV = - Cost + present value of all cash flows

Cost = $350,000

Present value of all cash flows = C*{[1 - (1+r) ^-n]/r}

Where C = Yearly cash flows = $140,000, r = discount rate = 9%, n = time of generating cash flows = 3 years.

Therefore,

NPV = - 350,000 + 140,000*{[1 - (1+0.09) ^-3]/0.09} = $4,381.25