Net Present Value

Hi Mr. Maffot,

Please I am having a hard time figuring this question out. Tried Annuity and Present value tables but I’m not getting the answer. Can you please explain the answer to me.

Able Ltd is considering a new project, the details of which are attached.

a) Calculate the Net Present Value of the project (to the nearest %).

Information:
Initial cost – $300,000
Expected life – 5 years
Estimated scrap value – $20,000
Addition revenue from the project – $120,000 per year
Incremental costs of the project • $30,000 per year

Cost of capital – 10%