NPV A project has an initial cost of $67,750, expected net cash inflows of $15,000 per year for 8 years, and a cost of capital of 14%. what is the project's NPV? (Hint: Begin by constructing a ti...

Question

Question

NPV A project has an initial cost of $67,750, expected net cash inflows of $15,000 per year for 8 years, and a cost of capita

Answer 1

Answer #1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=15000[1-(1.14)^-8]/0.14

=15000*4.638863894

=$69582.96

NPV=Present value of inflows-Present value of outflows

=$69582.96-$67750

=$1832.96(Approx).

Answer 2

Similar Homework Help Questions

NPV A project has an initial cost of $61,975, expected net cash inflows of $15,000 per...

NPV A project has an initial cost of $61,975, expected net cash inflows of $15,000 per year for 10 years, and a cost of capital of 13%. What is the project's NPV (Hint: Begin by constructing a timeline.) Do not round Intermediate calculations. Round your answer to the nearest cent. A project has an initial cost of $60,000, expected net cash inflows of $14,000 per year for 7 years, and a cost of capital of 8%. What is the project's...
A project has an initial cost of $47,600, expected net cash inflows of $15,000 per year...

A project has an initial cost of $47,600, expected net cash inflows of $15,000 per year for 7 years, and a cost of capital of 12%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent.
A project has an initial cost of $44,700, expected net cash inflows of $15,000 per year...

A project has an initial cost of $44,700, expected net cash inflows of $15,000 per year for 12 years, and a cost of capital of 13%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent. A project has an initial cost of $60,000, expected net cash inflows of $14,000 per year for 9 years, and a cost of capital of 8%. What is the...

NPV A project has an initial cost of $50,000, expected net cash inflows of $13,000 per...

NPV A project has an initial cost of $50,000, expected net cash inflows of $13,000 per year for 8 years, and a cost of capital of 14%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to the nearest cent. $
NPV A project has an initial cost of $44,175, expected net cash inflows of $13,000 per year for 6 years, and a cost of c...

NPV A project has an initial cost of $44,175, expected net cash inflows of $13,000 per year for 6 years, and a cost of capital of 14%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent.
NPV A project has an initial cost of $47,325, expected net cash inflows of $14,000 per...

NPV A project has an initial cost of $47,325, expected net cash inflows of $14,000 per year for 7 years, and a cost of capital of 8%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent.

NPV A project has an initial cost of $50,600, expected net cash inflows of $13,000 per...

NPV A project has an initial cost of $50,600, expected net cash inflows of $13,000 per year for 6 years, and a cost of capital of 12%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent.
A project has an initial cost of $53,750, expected net cash inflows of $12,000 per year...

A project has an initial cost of $53,750, expected net cash inflows of $12,000 per year for 12 years, and a cost of capital of 8%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to the nearest cent.
A project has an initial cost of $42,600, expected net cash inflows of $14,000 per year...

A project has an initial cost of $42,600, expected net cash inflows of $14,000 per year for 10 years, and a cost of capital of 9%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent. $

A project has an initial cost of $60,625, expected net cash inflows of $15,000 per year...

A project has an initial cost of $60,625, expected net cash inflows of $15,000 per year for 7 years, and a cost of capital of 14%. What is the project's PI? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.