A project has an initial cost of $65,475, expected net cash inflows of $12,000 per year...

A project has an initial cost of $65,475, expected net cash inflows of $12,000 per year for 11 years, and a cost of capital of 10%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent.

Expert Solution

Ans $ 12465.73

Year	Project Cash Flows (i)	DF@ 10%	DF@ 10% (ii)	PV of Project A ( (i) * (ii) )
0	-65475	1	1	(65,475.00)
1	12000	1/((1+10%)^1)	0.909	10,909.09
2	12000	1/((1+10%)^2)	0.826	9,917.36
3	12000	1/((1+10%)^3)	0.751	9,015.78
4	12000	1/((1+10%)^4)	0.683	8,196.16
5	12000	1/((1+10%)^5)	0.621	7,451.06
6	12000	1/((1+10%)^6)	0.564	6,773.69
7	12000	1/((1+10%)^7)	0.513	6,157.90
8	12000	1/((1+10%)^8)	0.467	5,598.09
9	12000	1/((1+10%)^9)	0.424	5,089.17
10	12000	1/((1+10%)^10)	0.386	4,626.52
11	12000	1/((1+10%)^11)	0.350	4,205.93
		NPV		12,465.73

jeff jeffy answered 11 months ago

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