Babcock Inc. is considering a project that has the following cash flow and WACC data. What...

Question

Question

Babcock Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
WACC:	12%
Year:	0	1	2	3
Cash flows:	-$1,250	$400	$500	$600

Answer 1

Answer #1


Project
Discount rate	0.12
Year	0	1	2	3
Cash flow stream	-1250	400	500	600
Discounting factor	1	1.12	1.2544	1.404928
Discounted cash flows project	-1250	357.1429	398.5969	427.0681
NPV = Sum of discounted cash flows
NPV Project =	-67.19
Where
Discounting factor =	(1 + discount rate)^(Corresponding period in years)
Discounted Cashflow=	Cash flow stream/discounting factor

Answer 2

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