What NPV is calculated using this method? The initial investment in the project is $45,000. The firm’s cost of capital is 12%, however projects in this risk class have a 14% required rate of return.

The Net Present Value (NPV) of a project can be calculated using the following formula: NPV = -Initial Investment + (Cash Flow/(1+r)) where Cash Flow is total cash flow & r is discount rate. In this case, the initial investment is 45000 and the required rate of return is 14% thus yielding an NPV figure of -$45,000. This value indicates that the project does not provide enough value for investors to move forward with it given their current cost of capital being 12%.

It’s important to note that when calculating other projects in this risk class, one must adjust the required rate according to each unique situation as they may not all yield same results. Furthermore having an effective strategy should enable entities better manage their finances while still achieving desired outcomes regardless of any underlying circumstances.

Ultimately though by properly assessing such variables organizations should be able to make more informed decisions going forward so as to maximize returns over extended periods of time.