Strange Manufacturing Company is purchasing a production facility at a cost of $21 million. The company expects the proj...
Strange Manufacturing Company is purchasing a production facility at a cost of $21 million. The company expects the project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent. What is the net present value of this project? (Round to the nearest dollar)
Homework Answers
We see that the net present value of the project is given as
equal to=-21+7/18%*(1-1/1.18^5)=$0.89019715 million or
$890197.15
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Strange Manufacturing Company is purchasing a production facility at a cost of $21 million. The company expects the proj...
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Strange Manufacturing Company is purchasing a production facility at a cost of 521 million. The company expects the project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent. What is the net present value of this project? (Round to the nearest dollar) Select one: A. 5890,197 O O O B. 51,213,909 C. $905,888 D. $777,713
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