Question

In: Finance

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.

Solutions

Expert Solution

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 2 years ago
Next > < Previous

Related Solutions

What is the NPV of a project that costs $120,000 today and is expected to generate...
What is the NPV of a project that costs $120,000 today and is expected to generate annual cash inflows of $10,000 for the next 12 years, followed by a final inflow of $21,000 in the year after. Use discount rate of 14%. Round to the nearest cent.  
What is the NPV of a project that costs $31,000 today and is expected to generate...
What is the NPV of a project that costs $31,000 today and is expected to generate annual cash inflows of $11,000 for the next 7 years, followed by a final inflow of $13,000 in year 8. Cost of capital is 8.7%. Round to the nearest cent.
What is the NPV of a project that costs $38,000 today and is expected to generate...
What is the NPV of a project that costs $38,000 today and is expected to generate annual cash inflows of $9,000 for the next 7 years, followed by a final inflow of $15,000 in year 8. Cost of capital is 7.4%. Round to the nearest cent.
What is the NPV of a project that costs $13,000 today and another $6,000 in one...
What is the NPV of a project that costs $13,000 today and another $6,000 in one year, and is then expected to generate 11 annual cash inflows of $3,000 starting at the end of year 4. Cost of capital is 10%. Round to the nearest cent. ​[Hint: There are two outflows here, today and year 1. You will need to discount the year 1 cost at the project's discount rate when calculating PV(outflows).]
What is the NPV of a project that costs $10,000 today and another $10,000 in one...
What is the NPV of a project that costs $10,000 today and another $10,000 in one year, and is then expected to generate 8 annual cash inflows of $4,000 each starting at the end of year 6? The expected return on the market is 9.4%, the risk-free rate is 2% and the project’s beta is 1.4.
What is the NPV of a project that costs $10,000 today and another $10,000 in one...
What is the NPV of a project that costs $10,000 today and another $10,000 in one year, and is then expected to generate 8 annual cash inflows of $4,000 each starting at the end of year 6? The expected return on the market is 9.4%, the risk-free rate is 2% and the project’s beta is 1.4
What is the NPV of a project that costs $13,000 today and another $7,000 in one...
What is the NPV of a project that costs $13,000 today and another $7,000 in one year, and is then expected to generate 11 annual cash inflows of $3,000 starting at the end of year 4. Cost of capital is 11%. Round to the nearest cent. ​[Hint: There are two outflows here, today and year 1. You will need to discount the year 1 cost at the project's discount rate when calculating PV(outflows).]
What is the NPV of a project that costs $10,000 today and another $10,000 in one...
What is the NPV of a project that costs $10,000 today and another $10,000 in one year, and is then expected to generate 8 annual cash inflows of $4,000 each starting at the end of year 5? Assume a cost of capital of 13% and an IRR of 6.17%.
-What is the Profitability Index of a project that costs $28,000 today and is expected to...
-What is the Profitability Index of a project that costs $28,000 today and is expected to generate annual cash inflows of $3,000 for the following 11 years. Use discount rate of 7%. Round to two decimal places. -Installing a solar panel system on your roof comes with a total upfront cost of $18,000 after all tax credits. If the solar panels reduce your utility bill by $1000 per year, what is the Payback Period of installing the solar panel system?...
What is the Profitability Index of a project that costs $39,000 today and is expected to...
What is the Profitability Index of a project that costs $39,000 today and is expected to generate annual cash inflows of $5,000 for the following 8 years. Assume the company's WACC is 9%. Round to two decimal places.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT