To compute the NPV (Net Present Value) for Project M, we follow these steps:

1. Formula for NPV: $NPV = \sum_{t=0}^{n} \frac{C_t}{(1 + r)^t}$ where:

   • $C_t$ = Cash flow at time $t$,
   • $r$ = Discount rate (9% or 0.09),
   • $t$ = Time period.

2. Inputs:

   • Discount rate ($r$) = 9% = 0.09.
   • Cash flows ($C_t$):
     • $C_0 = -3500$,
     • $C_1 = 750$,
     • $C_2 = 880$,
     • $C_3 = 920$,
     • $C_4 = 1000$,
     • $C_5 = 500$.

3. Calculate each term: We discount each cash flow to its present value using the formula: $PV_t = \frac{C_t}{(1 + r)^t}.$

Let me calculate this. Input values cash_flows = [-3500, 750, 880, 920, 1000, 500] # Cash flows at each time period discount_rate = 0.09 # Discount rate (9%)

Compute the NPV

npv = sum(cf / (1 + discount_rate) ** t for t, cf in enumerate(cash_flows)) npvThe Net Present Value (NPV) for Project M is -327.45 (rounded to two decimal places).

Decision:

Since the NPV is negative, the project should not be accepted.

Would you like a detailed breakdown of the calculations? Let me know!

Here are 5 related questions you might explore:

1. How does the discount rate affect the NPV calculation?
2. What are the implications of a positive NPV in project evaluation?
3. How would the NPV change if the discount rate were 5% instead of 9%?
4. What alternative methods can be used to evaluate a project’s financial viability?
5. What is the relationship between NPV and Internal Rate of Return (IRR)?

Tip:

When calculating NPV, always confirm the time period and discount rate are consistent (e.g., annually, quarterly) to avoid errors.