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Project L requires an initial outlay at t = 0 of $60,000, its expected cash inflows...

Project L requires an initial outlay at t = 0 of $60,000, its expected cash inflows are $11,000 per year for 9 years, and its WACC is 11%. What is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.

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Expert Solution

Year Cash Flows ($) PV Factor @ 11% PV of Cash Flows
0 -60,000.00 1 -60,000.00
1                 11,000.00 0.9009                   9,909.91
2                 11,000.00 0.8116                   8,927.85
3                 11,000.00 0.7312                   8,043.11
4                 11,000.00 0.6587                   7,246.04
5                 11,000.00 0.5935                   6,527.96
6                 11,000.00 0.5346                   5,881.05
7                 11,000.00 0.4817                   5,298.24
8                 11,000.00 0.4339                   4,773.19
9                 11,000.00 0.3909                   4,300.17
NPV                       907.52
NPV
= Present Value of Cash Inflows - Initial Investment
= $ 907.52

jeff jeffy answered 1 year ago
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