Question

NPV A project has annual cash flows of $6,000 for the next 10 years and then \$7,000 each year for the following Years. The of this 20-year project is 13.17\% . If the 12%, what is the project's NPV your answer to the nearest cent no initial outflow

Answer 1

Calculation of Project's NPV

Year	Cashflows	Discount Rate @10%	Discounted Cashflows	Discount Rate @10%	Discounted Cashflows
A	B	C = 1/(1+12%)^n	D = B*C	E = 1/(1+13.17%)^n	F = B*E
1	6000	0.892857143	5357.142857	0.883626403	5301.758417
2	6000	0.797193878	4783.163265	0.78079562	4684.773718
3	6000	0.711780248	4270.681487	0.689931625	4139.589748
4	6000	0.635518078	3813.10847	0.6096418	3657.850798
5	6000	0.567426856	3404.561134	0.53869559	3232.173542
6	6000	0.506631121	3039.786727	0.476005647	2856.03388
7	6000	0.452349215	2714.095292	0.420611157	2523.666944
8	6000	0.403883228	2423.299368	0.371663124	2229.978743
9	6000	0.360610025	2163.66015	0.328411349	1970.468095
10	6000	0.321973237	1931.83942	0.290192939	1741.157635
11	7000	0.287476104	2012.332729	0.256422143	1794.955
12	7000	0.256675093	1796.725651	0.226581376	1586.06963
13	7000	0.22917419	1604.219331	0.200213286	1401.493002
14	7000	0.204619813	1432.338688	0.176913746	1238.39622
15	7000	0.182696261	1278.873829	0.156325657	1094.279597
16	7000	0.163121662	1141.851633	0.138133478	966.9343437
17	7000	0.145644341	1019.510387	0.122058388	854.4087158
18	7000	0.13003959	910.2771308	0.107854014	754.9781
19	7000	0.116106777	812.7474382	0.095302655	667.1185827
20	7000	0.103666765	725.6673556	0.084211942	589.4835934
NPV of the Project			46635.88234		43285.5683

NPV of the Project at 13.17% discount rate is $43,285.57

NPV of the Project at 12% discount rate is $46,635.88