Your firm is looking at a new investment opportunity, Project Alpha, with net cash flows as follows:

---- Net Cash Flows ----
Project Alpha

Initial Cost at T-0 (Now) ($10,000)
cash inflow at the end of year 1 6,000
cash inflow at the end of year 2 4,000
cash inflow at the end of year 3 2,000

Calculate project Alpha's Net Present Value (NPV), assuming your firm’s required rate of return is 10%.

10000

To calculate the Net Present Value (NPV) of Project Alpha, we need to discount the future cash flows to their present value and then subtract the initial cost. The formula for NPV is:

NPV = Σ(CF / (1 + r)^t) - Initial Cost

Where:
- CF is the cash flow for each year
- r is the required rate of return (10% in this case)
- t is the time period (1, 2, 3)

Let's calculate the NPV step by step:

1. Discount the cash flows to their present value:

Year 1 cash flow: $6,000 / (1 + 0.10)^1 = $5,454.55
Year 2 cash flow: $4,000 / (1 + 0.10)^2 = $3,305.79
Year 3 cash flow: $2,000 / (1 + 0.10)^3 = $1,653.55

2. Sum up the present values of the cash flows:

NPV = $5,454.55 + $3,305.79 + $1,653.55

3. Subtract the initial cost:

NPV = ($5,454.55 + $3,305.79 + $1,653.55) - $10,000

Now, let's calculate the NPV:

NPV = $10,413.89 - $10,000
NPV = $413.89

Therefore, the Net Present Value (NPV) of Project Alpha, with a required rate of return of 10%, is $413.89.