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Project L costs $55,000, its expected cash inflows are $13,000 per year for 10 years, and...

Project L costs $55,000, its expected cash inflows are $13,000 per year for 10 years, and its WACC is 14%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

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Expert Solution

Calculation of Net present value:
Time Cashflow PVF @14% PV
               -                      -55,000                                      1.00                                 -55,000.00
          1.00                      13,000                                   0.877                                   11,403.51
          2.00                      13,000                                   0.769                                   10,003.08
          3.00                      13,000                                   0.675                                     8,774.63
          4.00                      13,000                                   0.592                                     7,697.04
          5.00                      13,000                                   0.519                                     6,751.79
          6.00                      13,000                                   0.456                                     5,922.63
          7.00                      13,000                                   0.400                                     5,195.29
          8.00                      13,000                                   0.351                                     4,557.27
          9.00                      13,000                                   0.308                                     3,997.60
        10.00                      13,000                                   0.270                                     3,506.67
                                  12,809.50
Net present value is $12809.50

jeff jeffy answered 1 year ago
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