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Compute the NPV for Project M if the appropriate cost of capital is 9 percent. (Negative amount should be indicated by a...

Compute the NPV for Project M if the appropriate cost of capital is 9 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Project M Time: 0 1 2 3 4 5 Cash flow –$1,200 $390 $520 $560 $640 $140

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Answer #1
Solution:
NPV for Project M is $572.28
Working Notes:
A B C = A x B
Time Cash flow PVF @ 9% Present Value
0 -1200 1 -1200
1 390 0.917431193 357.7982
2 520 0.841679993 437.6736
3 560 0.77218348 432.4227
4 640 0.708425211 453.3921
5 140 0.649931386 90.9904
NPV 572.28
Notes: PVF is calculated @ 9% = 1/(1+0.09)^n     where n is the period for which PVF is calculated.
Notes: NPV is the net of present values of all the cash inflow and outflows during the life of project . PVF is calculated based on cost of capital
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