The net present value of this project if it the start-up cost is $54.50
What is start-up?
Startup refers to a business that is just getting started. Startups are created by one or more business owners who desire to provide a good or service they feel there is a market for. These businesses typically have large startup expenses and little income, which is why they seek funding from a number of sources, including venture capitalists. Startups are businesses or endeavours that are concentrated on a certain good or service that the founders seek to market. These businesses often lack a fully formed business plan and, more importantly, sufficient funding to advance to the next stage of development. The founders of the majority of these businesses provide the initial funding.
PV of cash inflows= cash flow year1 × pvf1+ cf year2×pvf2+ cfy3×pvf3+ cfy4×pvf4=1100×.8888+1000×.7901+1050×.70233+1200×.6242=978+790+737+749=3254
NPV= PV OF CASH INFLOWS-STARTUP COST= 3254-3200=54.50
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