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In: Finance

Harry's Inc. is considering a project that has the following cash flow and WACC data. What...

Harry's Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV?

WACC: 10.75%
Year

0

1

2

3

4

5
Cash flows

−$1,000

$310

$310

$310

$310

$310

Solutions

Expert Solution

Rate = WACC = R = 10.75%

Present value = Df x Cash flows

Year

Cash flows

Discount factor = Df = 1/(1+R)^Year

PV of cash flows

0

(1,000.00)

1.000000

                 (1,000.00)

1

      310.00

0.902935

                      279.91

2

      310.00

0.815291

                      252.74

3

      310.00

0.736154

                      228.21

4

      310.00

0.664699

                      206.06

5

      310.00

0.600180

                      186.06

Net Present Value = Total of Present Values

$152.97

jeff jeffy answered 2 years ago
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