Question

Project K costs $50,000, its expected cash inflows are $11,000 per year for 11 years, and its WACC is 12%. What is the project's NPV? Round your answer to the nearest cent.

Project K costs $50,000, its expected cash inflows are $11,000 per year for 11 years, and its WACC is 12%. What is the project's NPV?

Project K costs $68,499.16, its expected cash inflows are $14,000 per year for 11 years, and its WACC is 13%. What is the project's IRR? Round your answer to two decimal places.

Answer 1

Project K costs $50,000, its expected cash inflows are $11,000 per year for 11 years, and its WACC is 12%. What is the project's NPV? Round your answer to the nearest cent.

=> In order to find the NPV, we have to find the Present values of all the cash flow by using the formula , where C is the cash flow, r is the discount rate (In this case WACC) and t is the time period

=> Add all the present values to get the NPV

Project K costs $68,499.16, its expected cash inflows are $14,000 per year for 11 years, and its WACC is 13%. What is the project's IRR? Round your answer to two decimal places.

=> Follow the same procedures of first question to get the value of NPV

=> IRR is the discount rate when the value of NPV = 0

=> In the equation , r is the value of Internal rate of return(IRR)

=>

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=> solve the equation or use the IRR function in excel by giving the values of cashflows to get the value of IRR