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In: Finance
Blink of an Eye Company is evaluating a 5-year project that will provide cash flows of...
Blink of an Eye Company is evaluating a 5-year project that will provide cash flows of $35,700, $62,070, $62,450, $60,260, and $43,300, respectively. The project has an initial cost of $158,080 and the required return is 8.3 percent. What is the project's NPV? (I got 49,836.08, can someone confirm)
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Expert Solution
Ans $ 49386.08
| Year | Project Cash Flows (i) | DF@ 8.3% | DF@ 8.3% (ii) | PV of Project ( (i) * (ii) ) |
| 0 | -158080 | 1 | 1 | (1,58,080.00) |
| 1 | 35700 | 1/((1+8.3%)^1) | 0.923361 | 32,963.99 |
| 2 | 62070 | 1/((1+8.3%)^2) | 0.852596 | 52,920.61 |
| 3 | 62450 | 1/((1+8.3%)^3) | 0.787254 | 49,163.98 |
| 4 | 60260 | 1/((1+8.3%)^4) | 0.726919 | 43,804.15 |
| 5 | 43300 | 1/((1+8.3%)^5) | 0.671209 | 29,063.35 |
| NPV | 49,836.08 | |||
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