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In: Finance
Cornell Enterprises is considering a project that has the following cash flow and WACC data. What...
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
Solutions
Expert Solution
| 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) | |||
jeff jeffy answered 2 years agoRelated Solutions
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Year:
0
1
2
3
4
5
Cash flows:
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$300
$300
$300
$300
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Year
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1
2
3
4
Cash flows
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CF
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