The project's NPV $209.56 approximately. The worth of all future cash flows, both positive and negative, discounted to the present, during the course of an investment, is known as net present value (NPV).
For the given question, the project's NPV is computed as shown below:
NPV = Initial investment + Present value of future cash flows
Present value is computed as follows:
= Future value / (1 + r)^n
So, the NPV at 9% is computed as follows:
= $ 5,500 / 1.121 + $ 5,500 / 1.122 + $ 5,500 / 1.123 + $ 5,500 / 1.124 + $ 5,500 / 1.125 + $ 5,500 / 1.126 + $ 5,500 / 1.127 + $ 5,500 / 1.128 + $ 5,500 / 1.129 + $ 5,500 / 1.1210 + $ 9,000 / 1.1211 + $ 9,000 / 1.1212 + $9,000 / 1.1213 + $ 9,000 / 1.1214 + $ 9,000 / 1.1215 + $ 9,000 / 1.1216 + $9,000 / 1.1217 + $9,000 / 1.1218 + $ 9,000 / 1.1219 + $ 9,000 / 1.1220
= $ 129,152.6577 approximately
The project's NPV at 12.45% is computed as follows:
= $ 5,500 / 1.12451 + $ 5,500 / 1.12452 + $ 5,500 / 1.12453 + $ 5,500 / 1.12454 + $ 5,500 / 1.12455 + $ 5,500 / 1.12456 + $ 5,500 / 1.12457 + $ 5,500 / 1.12458 + $ 5,500 / 1.12459 + $ 5,500 / 1.124510 + $ 9,000 / 1.124511 + $ 9,000 / 1.124512 + $ 9,000 / 1.124513 + $ 9,000 / 1.124514 + $ 9,000 / 1.124515 + $ 9,000 / 1.24516 + $ 9,000 / 1.124517 + $ 9,000 / 1.124518 + $ 9,000 / 1.124519 + $ 9,000 / 1.124520
= $ 128,943.0934
Now, we shall take the difference of the two NPV's as computed above:
= $ 129,152.6577 - $ 128,943.0934
= $ 209.56 approximately
Learn more about Net Present Value here: https://brainly.com/question/18848923
#SPJ4
