Question

In: Finance

Project Z has an initial investment of $54,769.00 . The project is expected to have cash...

Project Z has an initial investment of $54,769.00 . The project is expected to have cash inflows of $22,136.00 at the end of each year for the next 16.0 years. The corporation has a WACC of 12.76%.

Calculate the NPV for project Z.

Solutions

Expert Solution

Ans $ 93314.50

Year Project Cash Flows (i) DF@ 12.76% (ii) PV of Project ( (i) * (ii) )
0 -54769 1                          (54,769.00)
1 22136 0.886839                             19,631.07
2 22136 0.786484                             17,409.61
3 22136 0.697485                             15,439.53
4 22136 0.618557                             13,692.38
5 22136 0.548561                             12,142.94
6 22136 0.486485                             10,768.84
7 22136 0.431434                               9,550.23
8 22136 0.382613                               8,469.52
9 22136 0.339316                               7,511.10
10 22136 0.300919                               6,661.14
11 22136 0.266867                               5,907.36
12 22136 0.236668                               5,238.88
13 22136 0.209886                               4,646.04
14 22136 0.186135                               4,120.29
15 22136 0.165072                               3,654.04
16 22136 0.146393                               3,240.55
NPV                             93,314.50

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

Project Z has an initial investment of $73,431.00 . The project is expected to have cash...
Project Z has an initial investment of $73,431.00 . The project is expected to have cash inflows of $29,499.00 at the end of each year for the next 13.0 years. The corporation has a WACC of 11.55%. Calculate the NPV for project Z.
Project Z has an initial investment of $92,000. The project is expected to have cash inflows...
Project Z has an initial investment of $92,000. The project is expected to have cash inflows of $25,000 at the end of each year for the next 13 years. The corporation has a WACC of 11%. Calculate the NPV for project Z.
Project Z has an initial investment of $87,000. The project is expected to have cash inflows...
Project Z has an initial investment of $87,000. The project is expected to have cash inflows of $21,000 at the end of each year for the next 15 years. The corporation has a WACC of 14%. Calculate the NPV for project Z.
Project Z has an initial of $52,885.00. The project is expected to have cash inflows of...
Project Z has an initial of $52,885.00. The project is expected to have cash inflows of $25,325.00 at the end of each year for the next 19 years. The corporation has a WACC of 13.38%. Calculate the NPV for project Z.
A project has an initial investment of $10,000. It will have a net cash inflow of...
A project has an initial investment of $10,000. It will have a net cash inflow of $3,000 per year for 4 years, and no benefits thereafter. Assuming a relevant annual interest rate of 8%, what is the net present value for this project? (round to the nearest dollar, if applicable)
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,300 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 10%. Ignore inflation. a. Calculate project NPV for each company. (Do not...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,800 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 11%. Ignore inflation. A.Calculate project NPV for each company. (Do not round...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,200 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 30% and can depreciate the investment for tax purposes using the five-year MACRS tax depreciation schedule. Suppose the opportunity cost of capital is 8%. Ignore inflation. a. Calculate project...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,600 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 9%. Ignore inflation. Calculate the NPV for each company. What is the...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,700 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 11%. Ignore inflation. a. Calculate project NPV for each company. (Do not...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT