A project has an initial cost of $47925 expected net. cash inflows of $12000 per year...

A project has an initial cost of $47925 expected net. cash inflows of $12000 per year for 12 years, and a cost of capital of 11%. What is the project's NPV?

Expert Solution

NPV = PV of Cash Inflows - PV of Cash outflows

Year	CF	PVF @11%	Disc CF
0	$ -47,925.00	1.0000	$ -47,925.00
1	$ 12,000.00	0.9009	$ 10,810.81
2	$ 12,000.00	0.8116	$ 9,739.47
3	$ 12,000.00	0.7312	$ 8,774.30
4	$ 12,000.00	0.6587	$ 7,904.77
5	$ 12,000.00	0.5935	$ 7,121.42
6	$ 12,000.00	0.5346	$ 6,415.69
7	$ 12,000.00	0.4817	$ 5,779.90
8	$ 12,000.00	0.4339	$ 5,207.12
9	$ 12,000.00	0.3909	$ 4,691.10
10	$ 12,000.00	0.3522	$ 4,226.21
11	$ 12,000.00	0.3173	$ 3,807.40
12	$ 12,000.00	0.2858	$ 3,430.09
NPV			$ 29,983.27

jeff jeffy answered 5 months ago

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