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CFA Level 1
Corporate Finance

Net Present Value Calculation

Medium Capital Budgeting Cash Flow Estimation

A company is evaluating a potential investment project that requires an initial outlay of $200,000. The project is expected to generate cash flows of $70,000 at the end of Year 1, $80,000 at the end of Year 2, and $90,000 at the end of Year 3. The project’s terminal value at the end of Year 3 is estimated to be $50,000. Assuming a discount rate of 10%, what is the project's Net Present Value (NPV)?

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