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Project L costs $50,000, its expected cash inflows are $14,000 per year for 12 years, and...

Project L costs $50,000, its expected cash inflows are $14,000 per year for 12 years, and its WACC is 14%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

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Expert Solution

Computation of NPV
i ii iii=i*ii
year Cash flow PVIF @ 14% present value
0 -50000     1.0000       (50,000.00)
1 14000     0.8772         12,280.70
2 14000     0.7695         10,772.55
3 14000     0.6750           9,449.60
4 14000     0.5921           8,289.12
5 14000     0.5194           7,271.16
6 14000     0.4556           6,378.21
7 14000     0.3996           5,594.92
8 14000     0.3506           4,907.83
9 14000     0.3075           4,305.11
10 14000     0.2697           3,776.41
11 14000     0.2366           3,312.64
12 14000     0.2076           2,905.83
        29,244.09
therefore NPV =        29,244.09

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