Question

Project L costs $50,000, its expected cash inflows are $13,000 per year for 9 years, and its WACC is 14%. What is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.

$  

Answer 1

Present Value Factors = 1/(1+r)^n

where r = rate = 14%

n = Number of years the value need to be brought back.

Particulars	Years
0	1	2	3	4	5	6	7	8	9
Project cost	-50000
Cash Inflows (A)		13000	13000	13000	13000	13000	13000	13000	13000	13000
Present Vaue Factor @14%(B)	1	0.877193	0.769468	0.674972	0.59208	0.519369	0.455587	0.399637	0.350559	0.307508
Present Values (A*B)	-50000	11403.51	10003.08	8774.63	7697.044	6751.793	5922.625	5195.285	4557.268	3997.603
NPV (Sum of (A*B))	14302.83388