Question

What is the net present value (NPV) of a project that has an initial cash outflow of $12,587, at time 0, and the following ca
0 0
Add a comment Improve this question Transcribed image text
Answer #1
Solution:
NPV of the Project is       4802
Working Notes:
Notes: NPV of project we get by discounting project cash flow with required rate of return , NPV which is positive is acceptable to companies as it shows , the project is able to generate return more than required rate of return
A B C=A x B
Year Cash flow PVF @13%           Required rate of return Present value
0 -12,587 1                                      -12,587
1 5,988 0.884955752                                          5,299
2 6,530 0.783146683                                          5,114
3 5,235 0.693050162                                          3,628
4 5,459 0.613318728                                          3,348
NPV                                          4,802
Hence The project's NPV is          4802
Notes: PVF is calculated @ 13% = 1/(1+0.13)^n     where n is the period for which PVF is calculated.
Please feel free to ask if anything about above solution in comment section of the question.
Add a comment
Know the answer?
Add Answer to:
What is the net present value (NPV) of a project that has an initial cash outflow...
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