Project Z has an initial investment of $87,000. The project is expected to have cash inflows...

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.

Expert Solution

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

jeff jeffy answered 2 years ago

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