Question

A project has an initial cost of 40 7875 expected net cash inflows of 15,000 per...

A project has an initial cost of 40 7875 expected net cash inflows of 15,000 per year for 11 years and the cost of capital of 14% what is the projects npv
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Project’s Net Present Value (NPV)

Net Present Value (NPV) = Present Value of annual cash inflows – Initial Investment Cost

= $15,000(PVIFA 14%, 11 Years) - $407,875

= [$15,000 x 5.45273] - $407,875

= $81,791 - $4,07,875

= -$3,26,084 (Negative NPV)

“Therefore, The Net Present Value (NPV) of the Project is -$3,26,084 (Negative NPV)”

Add a comment
Know the answer?
Add Answer to:
A project has an initial cost of 40 7875 expected net cash inflows of 15,000 per...
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