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What is the NPV of a project that costs $31,000 today and is expected to generate...

What is the NPV of a project that costs $31,000 today and is expected to generate annual cash inflows of $11,000 for the next 7 years, followed by a final inflow of $13,000 in year 8. Cost of capital is 8.7%. Round to the nearest cent.

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Ans $ 31593.91

Year Project Cash Flows (i) DF@ 8.7% DF@ 8.7% (ii) PV of Project ( (i) * (ii) )
0 -31000 1 1                          (31,000.00)
1 11000 1/((1+8.7%)^1) 0.919963                             10,119.60
2 11000 1/((1+8.7%)^2) 0.846332                               9,309.66
3 11000 1/((1+8.7%)^3) 0.778595                               8,564.54
4 11000 1/((1+8.7%)^4) 0.716278                               7,879.06
5 11000 1/((1+8.7%)^5) 0.658950                               7,248.45
6 11000 1/((1+8.7%)^6) 0.606209                               6,668.30
7 11000 1/((1+8.7%)^7) 0.557690                               6,134.59
8 13000 1/((1+8.7%)^8) 0.513055                               6,669.71
NPV                             31,593.91

jeff jeffy answered 1 year ago
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