MGT 4143 – A firm is considering improving the ways customers and employees

Subject: Business    / Finance
Question

A firm is considering improving the ways customers and employees interact with its Web site, which will cost $40,000 for design and maintenance. The free cash flows resulting from the project are provided in the table below:

Free cash Flow

Initial outly -40,000

Inflow year 1 17,000

Inflow year 2 16,000

Inflow year 3 15,700

The required rate of return is 13%. What is the net present value?