Question

The revenue for a new product that will stay in market for five years is projected at $45,000 in year 1, and the revenue is expected to reduce by $5,000 per year. What is the present value of the projected revenue stream if the interest rate is 8% per year compounded annually?

Answer 1

Answer:

$142,810

Explanation:

Net present value is the Net value all cash inflows and outflows in present value term. All the cash flows are discounted using a required rate of return.

* Working for Net Present value is attached with this answer, Please find it.