In: Finance
NPV
Project L costs $50,000, its expected cash inflows are $14,000 per year for 9 years, and its WACC is 9%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
$
| NPV | $ 33,933.46 | ||
| Working: | |||
| Year | Cash flow | Discount factor | Present Value |
| a | b | c=1.09^-a | d=b*c |
| 0 | $ -50,000 | 1.0000 | $ -50,000.00 |
| 1 | $ 14,000 | 0.9174 | $ 12,844.04 |
| 2 | $ 14,000 | 0.8417 | $ 11,783.52 |
| 3 | $ 14,000 | 0.7722 | $ 10,810.57 |
| 4 | $ 14,000 | 0.7084 | $ 9,917.95 |
| 5 | $ 14,000 | 0.6499 | $ 9,099.04 |
| 6 | $ 14,000 | 0.5963 | $ 8,347.74 |
| 7 | $ 14,000 | 0.5470 | $ 7,658.48 |
| 8 | $ 14,000 | 0.5019 | $ 7,026.13 |
| 9 | $ 14,000 | 0.4604 | $ 6,445.99 |
| NPV | $ 33,933.46 |