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In: Finance

NPV Project L costs $50,000, its expected cash inflows are $14,000 per year for 9 years,...

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.

$

Solutions

Expert Solution

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

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