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A firm is considering a four year capital project which is expected to have net cash...

A firm is considering a four year capital project which is expected to have net cash inflows of $20,000, $15,000, $13,000 and $10,000 respectively in the four years following the start of the project. The cost of the project is $35,000 while the firm's weighted average cost of capital is 20%. What is the net present value of the project?

a

$15,500

b

-$5,300

c

$4,417

d

$23,000

B.

If the firm is considers a five year capital project which is expected to have cash inflows of $50,000 per year. The estimated annual cash outflows of the project are expected to be 25% of the annual cash inflows. The cost of the project is $110,000 while the firm's weighted average cost of capital is 20%. What is the net present value of the project?

a

-$72,625

b

$39,500

c

$77,500

d

$2,125
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