Question

Project A costs $5,500 and will generate annual after-tax net cash inflows of $1,700 for five...

Project A costs $5,500 and will generate annual after-tax net cash inflows of $1,700 for five years. What is the NPV using 12% as the discount rate? Round your present value factor to three decimal places and final answer to the nearest dollar.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=1700[1-(1.12)^-5]/0.12

=1700*3.605

=6128.5

NPV=Present value of inflows-Present value of outflows

=6128.5-5500

=$629(Approx).

Add a comment
Know the answer?
Add Answer to:
Project A costs $5,500 and will generate annual after-tax net cash inflows of $1,700 for five...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT