Nike Inc. intends to purchase a machine for $50,000, anticipating returns of $20,000 in the first year, $24,200 in the second year, and $25,000 in the third year. With a discount rate of 10 percent, the Net Present Value (NPV) of this investment is $______.

To calculate the Net Present Value (NPV) of Nike Inc.'s investment, you need to discount the future cash flows back to their present value using the discount rate. Here's how to calculate it step by step:

1. Calculate the present value (PV) of the cash flow for each year.

2. Sum up all the present values to get the total present value of all future cash flows.

3. Subtract the initial investment from the total present value to get the NPV.

Here are the calculations:

First, you find the present value for each year using the formula: PV = Future Cash Flow / (1 + r)^n where PV = Present Value, r = discount rate, and n = year number.

For the first year: PV = $20,000 / (1 + 0.10)^1 PV = $20,000 / 1.10 PV = $18,181.82 (rounded to two decimal places)

For the second year: PV = $24,200 / (1 + 0.10)^2 PV = $24,200 / 1.21 PV = $20,000 (rounded to two decimal places)

For the third year: PV = $25,000 / (1 + 0.10)^3 PV = $25,000 / 1.331 PV = $18,782.08 (rounded to two decimal places)

Now, sum up the present values of all future cash flows: Total PV = $18,181.82 + $20,000 + $18,782.08 Total PV = $56,963.90 (rounded to two decimal places)

Finally, subtract the initial investment to calculate the NPV: NPV = Total PV - Initial Investment NPV = $56,963.90 - $50,000 NPV = $6,963.90

Therefore, the Net Present Value (NPV) of this investment, with a discount rate of 10 percent, is $6,963.90.