In: Finance
Project L requires an initial outlay at t = 0 of $55,000, its expected cash inflows are $11,000 per year for 9 years, and its WACC is 10%. What is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. $
Ans $ 8349.26
Year | Project Cash Flows (i) | DF@ 10% | DF@ 10% (ii) | PV of Project ( (i) * (ii) ) |
0 | -55000 | 1 | 1 | (55,000.00) |
1 | 11000 | 1/((1+10%)^1) | 0.909 | 10,000.00 |
2 | 11000 | 1/((1+10%)^2) | 0.826 | 9,090.91 |
3 | 11000 | 1/((1+10%)^3) | 0.751 | 8,264.46 |
4 | 11000 | 1/((1+10%)^4) | 0.683 | 7,513.15 |
5 | 11000 | 1/((1+10%)^5) | 0.621 | 6,830.13 |
6 | 11000 | 1/((1+10%)^6) | 0.564 | 6,209.21 |
7 | 11000 | 1/((1+10%)^7) | 0.513 | 5,644.74 |
8 | 11000 | 1/((1+10%)^8) | 0.467 | 5,131.58 |
9 | 11000 | 1/((1+10%)^9) | 0.424 | 4,665.07 |
NPV | 8,349.26 |