Question

Project L costs $50,000, its expected cash inflows are $9,000 per year for 12 years, and its WACC is 9%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

Answer 1

Net Present Value(NPV) = Present Value of Cash Inflows - Cash Outflow
Year	Cash Flow	PVF @ 9%	DCF
			(CF * PVF )
1	9000	0.9174	8256.88
2	9000	0.8417	7575.12
3	9000	0.7722	6949.65
4	9000	0.7084	6375.83
5	9000	0.6499	5849.38
6	9000	0.5963	5366.41
7	9000	0.5470	4923.31
8	9000	0.5019	4516.80
9	9000	0.4604	4143.85
10	9000	0.4224	3801.70
11	9000	0.3875	3487.80
12	9000	0.3555	3199.81
		Total=	64446.53
Present Value of Cash Inflows = $64446.53
Cash Outflow = $50000
NPV = 64446.53-50000 = 14446.53
Answer is $14446.53