In: Finance
Project Z has an initial investment of $87,000. The project is expected to have cash inflows of $21,000 at the end of each year for the next 15 years. The corporation has a WACC of 14%. Calculate the NPV for project Z.
Ans $ 41985.53
Year | Project Cash Flows (i) | DF@ 14% | DF@ 14% (ii) | PV of Project A ( (i) * (ii) ) |
0 | -87000 | 1 | 1 | (87,000.00) |
1 | 21000 | 1/((1+14%)^1) | 0.877 | 18,421.05 |
2 | 21000 | 1/((1+14%)^2) | 0.769 | 16,158.82 |
3 | 21000 | 1/((1+14%)^3) | 0.675 | 14,174.40 |
4 | 21000 | 1/((1+14%)^4) | 0.592 | 12,433.69 |
5 | 21000 | 1/((1+14%)^5) | 0.519 | 10,906.74 |
6 | 21000 | 1/((1+14%)^6) | 0.456 | 9,567.32 |
7 | 21000 | 1/((1+14%)^7) | 0.400 | 8,392.38 |
8 | 21000 | 1/((1+14%)^8) | 0.351 | 7,361.74 |
9 | 21000 | 1/((1+14%)^9) | 0.308 | 6,457.67 |
10 | 21000 | 1/((1+14%)^10) | 0.270 | 5,664.62 |
11 | 21000 | 1/((1+14%)^11) | 0.237 | 4,968.96 |
12 | 21000 | 1/((1+14%)^12) | 0.208 | 4,358.74 |
13 | 21000 | 1/((1+14%)^13) | 0.182 | 3,823.46 |
14 | 21000 | 1/((1+14%)^14) | 0.160 | 3,353.91 |
15 | 21000 | 1/((1+14%)^15) | 0.140 | 2,942.03 |
NPV | 41,985.53 |