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What is the NPV of a project that costs $111,000 today and is expected to generate...

What is the NPV of a project that costs $111,000 today and is expected to generate annual cash inflows of $12,000 for the next 11 years. Cost of capital (discount rate) is 11%. Round to the nearest cent.

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Ans -$36521.82

Year Project Cash Flows (i) DF@ 11% DF@ 11% (ii) PV of Project ( (i) * (ii) )
0 -111000 1 1                       (1,11,000.00)
1 12000 1/((1+11%)^1) 0.900901                             10,810.81
2 12000 1/((1+11%)^2) 0.811622                               9,739.47
3 12000 1/((1+11%)^3) 0.731191                               8,774.30
4 12000 1/((1+11%)^4) 0.658731                               7,904.77
5 12000 1/((1+11%)^5) 0.593451                               7,121.42
6 12000 1/((1+11%)^6) 0.534641                               6,415.69
7 12000 1/((1+11%)^7) 0.481658                               5,779.90
8 12000 1/((1+11%)^8) 0.433926                               5,207.12
9 12000 1/((1+11%)^9) 0.390925                               4,691.10
10 12000 1/((1+11%)^11) 0.352184                               4,226.21
11 12000 1/((1+11%)^11) 0.317283                               3,807.40
NPV                          (36,521.82)

jeff jeffy answered 1 year ago
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