Determine the net present value for a project that costs $58,500 and would yield after-tax cash...

Determine the net present value for a project that costs $58,500 and would yield after-tax cash flows of $9,000 the first year, $11,000 the second year, $14,000 the third year, $16,000 the fourth year, $20,000 the fifth year, and $26,000 the sixth year. Your firm's cost of capital is 5.00%.

Question 27 options:

	$37,500.00
	$16,954.36
	$96,000.00
	$20,377.84
	$27,471.55

Expert Solution

Ans $20,377.84

Year	Project Cash Flows (i)	DF@ 5%	DF@ 5% (ii)	PV of Project ( (i) * (ii) )
0	-58500	1	1	(58,500.00)
1	9000	1/((1+5%)^1)	0.952	8,571.43
2	11000	1/((1+5%)^2)	0.907	9,977.32
3	14000	1/((1+5%)^3)	0.864	12,093.73
4	16000	1/((1+5%)^4)	0.823	13,163.24
5	20000	1/((1+5%)^5)	0.784	15,670.52
6	26000	1/((1+5%)^6)	0.746	19,401.60
		NPV		20,377.84

jeff jeffy answered 1 week ago

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