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Question 8. Solution needs to be handed in. A company is considering a project that requires an initial outlay of 10,000 SEK. The project will produce a constant cash-flow of 50 SEK every month (starting in one month) up to the end of year 5. From this moment on, this monthly cash-flows will grow at a rate equal to 0.2% and they will continue to so until the end of time. The discount rate to be used is equal to 5% (expressed as an EARL what is the NPV of this project? (Round your answer to two decimal digits)

hi how do i solve this step by step?

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Answer #1

Month Cash Flow Factor Month Cash Flow Factor@ 10,000.0O SEK 1.00000 10,000.00 SEK 52.04 SEK 0.91816 47.78 SEK 52.14 SEK 0.91444 47.68 SEK 52.25 SEK 0.91072 47.58 SEK 52.35 SEK 0.90703 47.48 SEK 52.46 SEK 0.90335 47.39 SEK 52.56 SEK 0.89968 47.29 SEK 52.67 SEK 089603 47.19 SEK 52.77 SEK 0.89240 47.09 SEK 52.88 SEK 0.88878 47.00 SEK 52.98 SEK 0.88517 46.90 SEK 53.09 SEK 0.88158 46.80 SEK 53.19 SEK 087800 46.71 SEK 53.30 SEK 0.87444 46.61 SEK 53.41 SEK 0.87089 46.51 SEK 53.51 SEK 0.86736 46.42 SEK 53.62 SEK 0.86384 46.32 SEK 53.73 SEK 086033 46.22 SEK 53.84 SEK 0.85684 46.13 SEK 53.94 SEK 0.85336 46.03 SEK 54.05 SEK 0.84990 45.94 SEK 54.16 SEK 0.84645 45.84 SEK 54.27 SEK 0.84302 45.75 SEK 54.38 SEK 0.83960 45.65 SEK 54.49 SEK 0.83619 45.56 SEK 54.59 SEK 0.83280 45.47 SEK 54.70 SEK 0.82942 45.37 SEK 54.81 SEK 0.82605 45.28 SEK 54.92 SEK 0.82270 45.19 SEK 55.03 SEK 0.81936 45.09 SEK 55.14 SEK 0.81604 45.00 SEK 55.25 SEK 0.81273 44.91 SEK 55.36 SEK 0.80943 44.81 SEK 55.47 SEK 0.80615 44.72 SEK 5.59 SEK 0.80288 44.63 SEK 55.70 SEK 0.79962 44.54 SEK 55.81 SEK 0.79637 44.44 SEK 55.92 SEK 0.79314 44.35 SEK 56.03 SEK 0.78992 44.26 SEK 56.14 SEK 0.78672 44.17 SEK 56.26 SEK 0.78353 44.08 SEK 49.39 SEK 49.18 SEK 0.95626 0.95238 51.11 SEK 51.32 SEK 51.52 SEK 51.62 SEK 0.93322 Net Present Value (NPV) -7,187.18 SEK Sum of Discounted cash flows from month-0 thru 60 NOTE: Discount factor @ 04074%-1/(1+0 4074%-1/(1+0.4074%)1 and so on. .1/(1+0.4074%,- Cash flow for month-2 50.00 SEK x (1+0.2%-50. 10 SEK, month-3 = 50. 10 SEK x (1+0.2%-50.20 SK; and so on Month-60 = 56.14 SEK x (1+0.2%) 56.26 SEK.

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