In: Finance
Project L costs $35,000, its expected cash inflows are $15,000 per year for 10 years, and its WACC is 14%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
Ans NPV = $ 43241.73
Year | Project Cash Flows (i) | DF@ 14% | DF@ 14% (ii) | PV of Project ( (i) * (ii) ) |
0 | -35000 | 1 | 1 | (35,000.00) |
1 | 15000 | 1/((1+14%)^1) | 0.877 | 13,157.89 |
2 | 15000 | 1/((1+14%)^2) | 0.769 | 11,542.01 |
3 | 15000 | 1/((1+14%)^3) | 0.675 | 10,124.57 |
4 | 15000 | 1/((1+14%)^4) | 0.592 | 8,881.20 |
5 | 15000 | 1/((1+14%)^5) | 0.519 | 7,790.53 |
6 | 15000 | 1/((1+14%)^6) | 0.456 | 6,833.80 |
7 | 15000 | 1/((1+14%)^7) | 0.400 | 5,994.56 |
8 | 15000 | 1/((1+14%)^8) | 0.351 | 5,258.39 |
9 | 15000 | 1/((1+14%)^9) | 0.308 | 4,612.62 |
10 | 15000 | 1/((1+14%)^10) | 0.270 | 4,046.16 |
NPV | 43,241.73 |