A project generates cash flows of $125k, $125k, and $95k. The required rate of return is...

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A project generates cash flows of $125k, $125k, and $95k. The required rate of return is...

A project generates cash flows of $125k, $125k, and $95k. The required rate of return is 10%.

The value of the project or “asset” is______. Hint: Remember the concept of the value of an asset.

business finance

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Answer 1

Answer #1

Project
Discount rate	10.000%
Year	0	1	2	3
Cash flow stream	0	125000	125000	95000
Discounting factor	1.000	1.100	1.210	1.331
Discounted cash flows project	0.000	113636.364	103305.785	71374.906
NPV = Sum of discounted cash flows
NPV =	288317.05
Where
Discounting factor =	(1 + discount rate)^(Corresponding period in years)
Discounted Cashflow=	Cash flow stream/discounting factor

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Answer 2

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A project generates cash flows of $125k, $125k, and $95k. The required rate of return is...

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Add Answer to: A project generates cash flows of $125k, $125k, and $95k. The required rate of return is...

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