A project needs an initial outlay of $3000 for equipment and will net a cash flow...

A project needs an initial outlay of $3000 for equipment and will net a cash flow of $300 for the next 12 years. At the end of the 12th year, there is a Salvage Value of $1000 for the equipment. What is the NPV of the project if the cost of capital is 12% p.a. effective (to the nearest dollar)?

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Answer:

Year	CF	Discounted CF
0	-3000	-3000
1	300	267.8571429
2	300	239.1581633
3	300	213.5340743
4	300	190.6554235
5	300	170.2280567
6	300	151.9893364
7	300	135.7047646
8	300	121.1649684
9	300	108.1830075
10	300	96.59197098
11	300	86.24283123
12	1300	333.6776208

	NPV	-885.0126394

NPV = -885.01

jeff jeffy answered 1 year ago

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