A project has an initial cost of $64,675, expected net cash inflows of $12,000 per year...

A project has an initial cost of $64,675, expected net cash inflows of $12,000 per year for 10 years, and a cost of capital of 13%. What is the project's NPV?

Expert Solution

NPV = PV of Cash Inflows - PV of Cash Outflows

Year	CF	PVF @13%	Disc CF
0	$ -64,675.00	1.0000	$ -64,675.00
1	$ 12,000.00	0.8850	$ 10,619.47
2	$ 12,000.00	0.7831	$ 9,397.76
3	$ 12,000.00	0.6931	$ 8,316.60
4	$ 12,000.00	0.6133	$ 7,359.82
5	$ 12,000.00	0.5428	$ 6,513.12
6	$ 12,000.00	0.4803	$ 5,763.82
7	$ 12,000.00	0.4251	$ 5,100.73
8	$ 12,000.00	0.3762	$ 4,513.92
9	$ 12,000.00	0.3329	$ 3,994.62
10	$ 12,000.00	0.2946	$ 3,535.06
NPV			$ 439.92

pls comment, if any further assistance is required

jeff jeffy answered 6 months ago

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