Helsinki Co. is considering a new project that will cost $328,500. The expected net cash inflows...

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Finance

Helsinki Co. is considering a new project that will cost$328,500. The expected net cash inflows from this project are$62,000 per year for 8 years. If Helsinki’s weighted average costof capital (WACC) is 6%, what is the project’s net present value(NPV), IRR, Payback Period, and Discount Period?
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3.7 Ratings (402 Votes)

NPV Present Value of Cash Inflows Present Value of Cash Outflows 620001106 1 620001106 2 620001106 3 620001106 4 620001106 5 620001106 6 620001106 8 328500 5650722 Hence the correct answer is 5650722 Let the IRR be y Now Present Value of Cash OutflowsPresent Value of Cash Inflows 3285006200010y 62000 10y2 6200010y3 6200010y8 Or y 10189 Hence the IRR is 10189 Payback Period Last See Answer

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Helsinki Co. is considering a new project that will cost$328,500. The expected net cash inflows from this project are$62,000 per year for 8 years. If Helsinki’s weighted average costof capital (WACC) is 6%, what is the project’s net present value(NPV), IRR, Payback Period, and Discount Period?Please show work.