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NPV Project K costs $40,000, its expected cash inflows are $13,000 per year for 12 years,...

NPV

Project K costs $40,000, its expected cash inflows are $13,000 per year for 12 years, and its WACC is 11%. What is the project's NPV? Round your answer to the nearest cent.

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Expert Solution

Year Cash flow PVIF@11% Present value
0 $                 (40,000) 1.000 $              (40,000.00)
1 $                    13,000 0.901 $                11,711.71
2 $                    13,000 0.812 $                10,551.09
3 $                    13,000 0.731 $                   9,505.49
4 $                    13,000 0.659 $                   8,563.50
5 $                    13,000 0.593 $                   7,714.87
6 $                    13,000 0.535 $                   6,950.33
7 $                    13,000 0.482 $                   6,261.56
8 $                    13,000 0.434 $                   5,641.04
9 $                    13,000 0.391 $                   5,082.02
10 $                    13,000 0.352 $                   4,578.40
11 $                    13,000 0.317 $                   4,124.68
12 $                    13,000 0.286 $                   3,715.93
Net present value $                44,400.63

jeff jeffy answered 3 years ago
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