In: Finance
Cornell Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC: 10.00% Year 0 1 2 3 Cash flows -$1,275 $450 $460 $470
Project should be rejected | ||||
Statement showing Cash flows | ||||
Particulars | Time | PVf 10% | Amount | PV |
Cash Outflows | - | 1.00 | (1,275.00) | (1,275.00) |
PV of Cash outflows = PVCO | (1,275.00) | |||
Cash inflows | 1.00 | 0.9091 | 450.00 | 409.09 |
Cash inflows | 2.00 | 0.8264 | 460.00 | 380.17 |
Cash inflows | 3.00 | 0.7513 | 470.00 | 353.12 |
PV of Cash Inflows =PVCI | 1,142.37 | |||
NPV= PVCI - PVCO | (132.63) |