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In: Finance

Living Colour Co. has a project available with the following cash flows: Year Cash Flow 0...

Living Colour Co. has a project available with the following cash flows:

Year Cash Flow
0
−$34,110
1 8,150
2 9,810
3
13,980
4 15,850
5
10,700

If the required return for the project is 8.5 percent, what is the project's NPV?

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Expert Solution

Ans $ 11242.67

Year Project Cash Flows (i) DF@ 8.5% DF@ 8.5% (ii) PV of Project A ( (i) * (ii) )
0 -34100 1 1                    (34,100.00)
1 8150 1/((1+8.5%)^1) 0.922                       7,511.52
2 9810 1/((1+8.5%)^2) 0.849                       8,333.16
3 13980 1/((1+8.5%)^3) 0.783                     10,945.06
4 15850 1/((1+8.5%)^4) 0.722                     11,436.95
5 10700 1/((1+8.5%)^5) 0.665                       7,115.99
NPV                     11,242.67

jeff jeffy answered 1 year ago
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