In: Finance
Find the net present value (NPV) for the following series of future cash flows, assuming the company’s cost of capital is 6.64 percent. The initial outlay is $339,858. Year 1: 163,676 Year 2: 147,656 Year 3: 123,800 Year 4: 178,407 Year 5: 149,077 Round the answer to two decimal places.
Calculation of NPV: | ||||
Particulars | Time | PVF 6.64% | Amount | PV |
Cash Outflow | - | 1.00 | (3,39,858.00) | (3,39,858.00) |
Cash Inflows | 1.00 | 0.9377 | 1,63,676.00 | 1,53,484.62 |
Cash Inflows | 2.00 | 0.8793 | 1,47,656.00 | 1,29,840.69 |
Cash Inflows | 3.00 | 0.8246 | 1,23,800.00 | 1,02,084.60 |
Cash Inflows | 4.00 | 0.7732 | 1,78,407.00 | 1,37,953.06 |
Cash Inflows | 5.00 | 0.7251 | 1,49,077.00 | 1,08,096.08 |
NPV | 2,91,601.06 | |||
NPV is $291601.06 |