Using a cost of capital of 15?%, calculate the net present value for the project shown...

Free

60.1K

Verified Solution

Question

Finance

Using a cost of capital of 15?%, calculate the net present valuefor the project shown in the following table and indicate whetherit is? acceptable
Initial investment   $-1,145
Year   Cash inflows
1   $76
2   $132
3   $185
4   $256
5   $316
6   $383
7   $277
8   $98
9   $43
10   $25
The net present value? (NPV) of the project is $_____
Please show all work and what inputs would be in a financialcalculator

Answer & Explanation Solved by verified expert

4.1 Ratings (666 Votes)

Calculation of Net Present Value:

Year	Cash flow	Discount factor	Present value
a	b	c=1.15^-a	d=b*c
0	$ -1,145	1.000	$ -1,145.00
1	$ 76	0.870	$ 66.09
2	$ 132	0.756	$ 99.81
3	$ 185	0.658	$ 121.64
4	$ 256	0.572	$ 146.37
5	$ 316	0.497	$ 157.11
6	$ 383	0.432	$ 165.58
7	$ 277	0.376	$ 104.13
8	$ 98	0.327	$ 32.04
9	$ 43	0.284	$ 12.22
10	$ 25	0.247	$ 6.18

Net Present Value			$ -233.83

The project is not acceptable.

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Using a cost of capital of 15?%, calculate the net present valuefor the project shown in the following table and indicate whetherit is? acceptableInitial investment $-1,145Year Cash inflows1 $762 $1323 $1854 $2565 $3166 $3837 $2778 $989 $4310 $25The net present value? (NPV) of the project is $_____Please show all work and what inputs would be in a financialcalculator