The project's NPV is $29.26 if the required rate of return is 16%.
A number of cash flows that occur at various times are covered by the net present value (NPV). Depending on how much time passes between now and a cash flow, it is possible to calculate its present value. The discount rate also has an impact. Money's time value is taken into account by NPV. It offers a method for assessing and contrasting capital projects or financial goods with cash flows that are dispersed over time, such as loans, investments, insurance contract payouts, and many other applications. Depending on the rate of return that is chosen, the current value of the expected future cash flows will decrease. Since present cash flow can be invested right away and start earning returns, it is more valuable than an equivalent future cash flow.
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