The chief financial officer of five star food distributors has asked you to evaluate the building of a new warehouse. as an astute student of business you explain that the best way to evaluate the project is to use this common method adds the present value of all of the estimated future cash flows; then, it subtracts the initial costs of the investment to determine whether the proposed project is a good idea.

The answer is "net present value".

Net Present Value (NPV) is the estimation of all future cash flows (positive and negative) over the whole existence of a venture limited to the present. Net Present Value examination is a type of natural valuation and is utilized widely crosswise over back and representing deciding the estimation of a business, speculation security, capital task, new pursuit, cost decrease program, and anything that includes income.

750 h and costs $0.60 per bulb.