A project has an initial cost of $60,500, expected net cash inflows of $13,000 per year...

A project has an initial cost of $60,500, expected net cash inflows of $13,000 per year for 8 years, and a cost of capital of 12%. 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 $ 4079.32

Year	Project Cash Flows (i)	DF@ 12%	DF@ 12% (ii)	PV of Project ( (i) * (ii) )
0	-60500	1	1	(60,500.00)
1	13000	1/((1+12%)^1)	0.893	11,607.14
2	13000	1/((1+12%)^2)	0.797	10,363.52
3	13000	1/((1+12%)^3)	0.712	9,253.14
4	13000	1/((1+12%)^4)	0.636	8,261.74
5	13000	1/((1+12%)^5)	0.567	7,376.55
6	13000	1/((1+12%)^5)	0.507	6,586.20
7	13000	1/((1+12%)^5)	0.452	5,880.54
8	13000	1/((1+12%)^5)	0.404	5,250.48
		NPV		4,079.32

jeff jeffy answered 6 months ago

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