Town Inc is considering investing in a project with the following expected cash flows: -111, 12,...

Town Inc is considering investing in a project with the following expected cash flows: -111, 12, 26, 33. If Town Inc expected cost of capital is 0.18, what is the expected NPV of the project?

Expert Solution

Ans -$62.07 (Negative)

Year	Project Cash Flows (i)	DF@ 18%	DF@ 18% (ii)	PV of Project A ( (i) * (ii) )
0	-111	1	1	(111.00)
1	12	1/((1+18%)^1)	0.847	10.17
2	26	1/((1+18%)^2)	0.718	18.67
3	33	1/((1+18%)^3)	0.609	20.08
		NPV		(62.07)

jeff jeffy answered 1 year ago

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