Question
In: Finance
Project B has the following Cash Flows: Cost = $800,000; Year 1 = $329,000; Year 2...
Project B has the following Cash Flows: Cost = $800,000; Year 1 = $329,000; Year 2 = $260,750; Year 3 = $192,500; Year 4 = $147,000; Year 5 = $101,500. Calculate the Net Present Value when using a WACC of 8.28%.
Solutions
Expert Solution
Ans $ 52995.37
| Year | Project Cash Flows (i) | DF@ 8.28% | DF@ 8.28% (ii) | PV of Project ( (i) * (ii) ) |
| 0 | -800000 | 1 | 1 | (8,00,000.00) |
| 1 | 329000 | 1/((1+8.28%)^1) | 0.923532 | 3,03,841.89 |
| 2 | 260750 | 1/((1+8.28%)^2) | 0.852911 | 2,22,396.44 |
| 3 | 192500 | 1/((1+8.28%)^3) | 0.787690 | 1,51,630.30 |
| 4 | 147000 | 1/((1+8.28%)^4) | 0.727456 | 1,06,936.10 |
| 5 | 101500 | 1/((1+8.28%)^5) | 0.671829 | 68,190.65 |
| NPV | 52,995.37 | |||
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