Question

Check My Work (1 remaining) eBook A project has annual cash flows of $5,500 for the next 10 years and then $9,500 each year for the following 10 years. The IRR of this 20-year project is 12.54%. If the firm's WACC is 12%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. $ 48,358.82 Hide Feedback Incorrect

Answer 1

Investment is 46514.38 that is present value of cash inflows at 12.54%

NPV is:

Year	Cash flow	× factor@ 12.00%	Present value
0	$      (46,514.38)	1.0000	$            (46,514.38)
1	$          5,500.00	0.8929	$                4,910.71
2	$          5,500.00	0.7972	$                4,384.57
3	$          5,500.00	0.7118	$                3,914.79
4	$          5,500.00	0.6355	$                3,495.35
5	$          5,500.00	0.5674	$                3,120.85
6	$          5,500.00	0.5066	$                2,786.47
7	$          5,500.00	0.4523	$                2,487.92
8	$          5,500.00	0.4039	$                2,221.36
9	$          5,500.00	0.3606	$                1,983.36
10	$          5,500.00	0.3220	$                1,770.85
11	$          9,500.00	0.2875	$                2,731.02
12	$          9,500.00	0.2567	$                2,438.41
13	$          9,500.00	0.2292	$                2,177.15
14	$          9,500.00	0.2046	$                1,943.89
15	$          9,500.00	0.1827	$                1,735.61
16	$          9,500.00	0.1631	$                1,549.66
17	$          9,500.00	0.1456	$                1,383.62
18	$          9,500.00	0.1300	$                1,235.38
19	$          9,500.00	0.1161	$                1,103.01
20	$          9,500.00	0.1037	$                   984.83
NPV		7.4694	$                1,844.44

NPV is 1,844.44

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