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Duffer Resorts is redoing its golf course at a cost of $2,744,320. It expects to generate...
Duffer Resorts is redoing its golf course at a cost of $2,744,320. It expects to generate cash flows of $1,223,445, $2,007,812, and $3,147,890 over the next three years. If the appropriate discount rate for the firm is 13 percent, what is the NPV of this project? (Do not round intermediate computations. Round final answer to nearest dollar.)
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Expert Solution
Ans $ 2092432
| Year | Project Cash Flows (i) | DF@ 13% | DF@ 13% (ii) | PV of Project ( (i) * (ii) ) |
| 0 | -2744320 | 1 | 1 | (27,44,320.00) |
| 1 | 1223445 | 1/((1+13%)^1) | 0.884956 | 10,82,694.69 |
| 2 | 2007812 | 1/((1+13%)^2) | 0.783147 | 15,72,411.31 |
| 3 | 3147890 | 1/((1+13%)^3) | 0.693050 | 21,81,645.68 |
| NPV | 20,92,431.67 |
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