A project will produce cash inflows of $1,750 a year for four years. The project initially...

A project will produce cash inflows of $1,750 a year for four years. The project initially costs $10,600 to get started. In year five, the project will be closed and as a result should produce a cash inflow of $8,500. What is the net present value of this project if the required rate of return is 14.75%?

		-$1,306.18
		-$935.56
		$5,474.76
		$1,011.40

Solutions

Expert Solution

Particulars	Year	Cash flows	PVF @ 14.75%	PV
Cash outflow	0	-10600	1.00	(10,600.00)
Cash inflow	1	1750	0.87	1,525.05
Cash inflow	2	1750	0.76	1,329.02
Cash inflow	3	1750	0.66	1,158.19
Cash inflow	4	1750	0.58	1,009.32
Cash inflow	5	8500	0.50	4,272.24
Net Present Value				(1,306.18)

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

4-A project will produce cash inflows of $1,750 a year for four years. The project initially...

4-A project will produce cash inflows of $1,750 a year for four years. The project initially costs $10,600 to get started. In year five, the project will be closed and as a result should produce a cash inflow of $8,500. What is the net present value of this project if the required rate of return is 13.75%? 5-What is the net present value of a project that has an initial cash outflow of $-11,500, at time 0, and the following...

2. A project will produce cash inflows of $3,200 a year for 4 years with a...

2. A project will produce cash inflows of $3,200 a year for 4 years with a final cash inflow of $5,700 in year 5. The project's initial cost is $9,500. What is the net present value of this project if the required rate of return is 16 percent? Please show all work preferably with the formulas, not just the grid. Thank you

A project will produce cash inflows of $3,100 a year for 3 years. The project's initial...

A project will produce cash inflows of $3,100 a year for 3 years. The project's initial cost is $10,400. What is the profitability index value if the required rate of return is 16 percent? Group of answer choices 0.90 0.33 1.09 0.67 -0.88

the cost for a four year project is 1,400,000. The respective cash inflows for years 1,2,3,and...

the cost for a four year project is 1,400,000. The respective cash inflows for years 1,2,3,and 4 are 600,000 , 700,000 , 500,000 , and 200,000. What is the discounted payback period if the discount rate is 6%. No financial calculator work by hand step by step.

A project will produce an operating cash flow of $15,200 a year for four years. The...

A project will produce an operating cash flow of $15,200 a year for four years. The initial cash investment in the project will be $50,000. The net after-tax salvage value is estimated at $4,000 and will be received during the last year of the project’s life. What is the internal rate of return for this project? Should the project be accepted if the cost of capital is 10%? Group of answer choices 8.31%; No, project should be rejected 10.81%; Yes,...

A project will produce an operating cash flow of $295,000 a year for four years. The...

A project will produce an operating cash flow of $295,000 a year for four years. The initial cash outlay for equipment will be $721,000. The net aftertax salvage value of $72,000 will be received at the end of the project. The project requires $79,000 of net working capital that will be fully recovered when the project ends. What is the net present value of the project if the required rate of return is 15 percent? $114,372 $121,017 $128,553 $136,764 $144,915

Erica is considering a project that will produce cash inflows of $2,999 a year for 3...

Erica is considering a project that will produce cash inflows of $2,999 a year for 3 years. The required rate of return is 15 percent and the initial cost is $6,800. What is the discounted payback period?

A project will produce cash inflows of $3,640 every six months for 3 years with a...

A project will produce cash inflows of $3,640 every six months for 3 years with a final cash inflow of $9,400 six months after (three and a half years from now). The project's initial cost is $25,883. What is the net present value of this project if the annual required rate of return is 7.9 percent? Now or Later, Inc. recently paid $2.10 as an annual dividend. Future dividends are projected at $2.5, $3 and $4 over the next three...

A four year project that has an initial cost of $60,000. The future cash inflows are...

A four year project that has an initial cost of $60,000. The future cash inflows are $40,000 00,$30,000,$20,000, and $10,000, respectively Given this informationwhat what is the IRR for?

The following four-year project has an initial cost of $1,000,000. The future cash inflows for the...

The following four-year project has an initial cost of $1,000,000. The future cash inflows for the next four years are $600,000, $500,000, $400,000, and $400,000, respectively. If the rate of return is 12%, determine the discounted payback period for this project.

Subjects