Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project? Year Project 0 ($11,368,000) 1 $ 2,142,590 2 $ 3,787,552 3 $ 3,250,650 4 $ 4,115,899 5 $ 4,556,424 Round to two decimal places.
Given
Discount rate = 13.8% (0.138)
Cash flows given in the table below
Year |
Project cash flows |
0 |
($11,368,000) |
1 |
$ 2,142,590 |
2 |
$ 3,787,552 |
3 |
$ 3,250,650 |
4 |
$ 4,115,899 |
5 |
$ 4,556,424 |
We have to calculate the NPW
NPW = – $11,368,000 + $ 2,142,590 (1+0.138) -1 + $ 3,787,552 (1+0.138) -2 +
$ 3,250,650 (1+0.138) -3 + $ 4,115,899 (1+0.138) -4 + $ 4,556,424 (1+0.138) -5
NPW = $486,555.14
The NPV of the project is $486,555.14
Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this...
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