Rossdale Flowers has a new greenhouse project with an initial cost of $319,500 that is expected to generate cash flows of $47,100 for 9 years and a cash flow of $62,500 in Year 10. If the required return is 8.9 percent, what is the project's NPV?
$105,241.20
-$15,893.27
−$9,328.17
$10,750.84
$83,375.17
Year | Cashflows | PVF at 8.90% | Present Value | ||
0 | -319500 | 1 | -319500 | ||
1 | 47100 | 0.918274 | 43250.69 | ||
2 | 47100 | 0.843226 | 39715.97 | ||
3 | 47100 | 0.774313 | 36470.13 | ||
4 | 47100 | 0.711031 | 33489.56 | ||
5 | 47100 | 0.652921 | 30752.58 | ||
6 | 47100 | 0.59956 | 28239.28 | ||
7 | 47100 | 0.55056 | 25931.39 | ||
8 | 47100 | 0.505565 | 23812.11 | ||
9 | 47100 | 0.464247 | 21866.03 | ||
10 | 62500 | 0.426306 | 26644.11 | ||
Net Present value | -9328.17 | ||||
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