Question

Cornell Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC: 8% Year 0 1 2 3 Cash Flow $-1050 $450 $460 $470 O $106.93 O $102.58 O $112.94 O $134.14 O $92.37

Answer 1

Please find the answer below
Statement showing NPV
Particulars	Time	PVf 8%	Amount	PV
Cash Outflows	-	1.00	(1,050.00)	(1,050.00)
PV of Cash outflows = PVCO				(1,050.00)
Cash inflows	1.00	0.9259	450.00	416.67
Cash inflows	2.00	0.8573	460.00	394.38
Cash inflows	3.00	0.7938	470.00	373.10
PV of Cash Inflows =PVCI				1,184.14
NPV= PVCI - PVCO				134.14
So correct answer is $134.14

Answer 2

SOLUTION ;

r = WACC = 8% = 0.98 

=> 1 + r = 1.08

NPV 

= - 1050 + 450/1.08 + 460/1.08^2 + 470/1.08^3 

= 134.14 ($) 

So, Project’s NPV is = $134.14 : 4th Option (ANSWER)

As NPV is positive, project should be accepted.