you are evaluating purchasing the rights to a project that will generate after tax expected cash...
Homework Answers
| PV of annual after tax cash inflows = 84000*(1.125^5-1)/(0.125*1.125^5) = | $ 2,99,087.74 |
| PV of addl. cash inflow at EOY 5 = 1000000/1.125^5 = | $ 5,54,928.96 |
| Total PV of cash inflows | $ 8,54,016.70 |
| Less: Initial cash outflow | $ 6,08,000.00 |
| NPV | $ 2,46,016.70 |
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