a company recently invested in a project with a 3 year life span. initial investment was 15060 and annual cash inflows are 7000 in year 1;8000 in year 2; and 9000 in year 3. The company expects a 15% rate of return. what is the net present value of the project?

The net present value (NPV) of a project is the difference between the present value of cash inflows and the present value of cash outflows over the project's life span. It measures the profitability of a project by comparing its expected return with the required return or discount rate. A positive NPV indicates that the project is worth undertaking, while a negative NPV suggests the opposite. To calculate the NPV of this project, we need to discount the annual cash inflows by the 15% rate of return and subtract the initial investment of 15060. Using the formula: \\text {NPV} = \\sum_ {t = 1}^n \\frac {C_t} { (1 + r)^t} - C_0 where: - $C_t$ is the cash inflow in year $t$ - $r$ is the discount rate or required return - $n$ is the number of years - $C_0$ is the initial investment we get: \\text {NPV} = \\frac {7000} { (1 + 0.15)^1} + \\frac {8000} { (1 + 0.15)^2} + \\frac {9000} { (1 + 0.15)^3} - 15060 \\text {NPV} = 6086.96 + 6034.07 + 5377.43 - 15060 \\text {NPV} = 1438.46 Therefore, the NPV of this project is **$1438.46**. This means that the project is expected to generate more value than its cost and is profitable for the company.