Question

Jazz World Inc. 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:	9.75%
Year	0	1	2	3	4
Cash flows	-$1,200	$400	$425	$450	$475

Answer 1

Year	Cash flows	PV
0	($1,200)	(1,200.00)
1	$400	364.46
2	$425	352.84
3	$450	340.41
4	$475	327.40
	NPV =	185.11

Project's NPV = $ 185.11