Question

Calculate NPV for the following:

The cost of capital is 12%

a. The project has an initial investment of $20,000 with expected after-tax operating cash flows of $7,000 the first year, $8,000 the second year, $9,000 the third year, $10,000 the fourth year, and $11,000 the fifth year. In addition, a cash payment of $17,500 must be made at the end of Year 54 to pay for environmental costs incurred at the termination of the project.

b. Initial investment of $20,000 with expected after-tax operating cash flows of $12,000 per year for each of the next 6 years. In addition, an additional investment of $38,000 must be made at the end of Year 3. Show all caclulations in excel please!

Answer 1