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

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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.

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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

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