Net present value

[yds3484]

A company is considering the purchase of a new machine with a initial outlay of $4500 and expected cash flows in years 1-4 of $2200 per year. The risk adjusted discount rate for the firm is 12 percent and risk free rate is 5 percent. What is the net present value of this project?

[factor-fiction]

It was covered in the lectures you issed and the text books you haven't read. Just google the formula for NPV and hve a go yourself. Anyone iwth a bit of nouse and the ability to use a calculator/spreadsheet should be able to do it.

[yds3484]

Can anyone give the formula to solve this problem

[redcrx]

yep
your lecturer

[factor-fiction]

There are loads of sites which show how to calculate NPV!
Here are two

http://www.scribd.com/doc/6580257/Managerial-E conomics-Chapter-14

http://www.energystar.gov/index.cfm?c=business .EPA_BUM_CH3_InvestAnalysis

Read them, see how they relate to your question and have a go.