Homework Answers
Solution:
| Computation of NPV | ||||
| Particulars | Period | Amount | PV factor at 9% | Present Value |
| Cash outflows: | ||||
| Initial investment | 0 | $450,000.00 | 1 | $450,000 |
| Present Value of Cash outflows (A) | $450,000 | |||
| Cash Inflows | ||||
| Annual cash inflows | 1-9 | $77,000.00 | 5.9953 | $461,634 |
| Present Value of Cash Inflows (B) | $461,634 | |||
| Net Present Value (NPV) (B-A) | $11,634 | |||
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