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Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this...

Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project?

Year Project

0 ($11,368,000)

1 $ 2,112,590

2 $ 3,787,552

3 $  3,125,650

4 $ 4,115,899

5 $ 4,556,424

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Expert Solution

Year Cash flow Discount factor Present value
a b c=1.138^-a d=b*c
0 $       -1,13,68,000      1.0000 $ -1,13,68,000.00
1                 21,12,590      0.8787           18,56,405.98
2                 37,87,552      0.7722           29,24,651.21
3                 31,25,650      0.6785           21,20,867.61
4                 41,15,899      0.5963           24,54,119.24
5                 45,56,424      0.5239           23,87,332.01
NPV $         3,75,376.04

jeff jeffy answered 1 year ago
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