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A 5-year project requires an investment of 10,000 at inception and maintenance express at the beginning...

A 5-year project requires an investment of 10,000 at inception and maintenance express at the beginning of each year. The maintenance expense is 300 for the first year and is anticipated to increase 6% each year thereafter. Projected annual returns from the project are 3,000 at the end of the first year and decrease by 100 per year thereafter. Calculate the NPV for a cost of capital of 7%.

I am not sure where I am going wrong but I got NPV = 70.62 and the answer is NPV = 63.71

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Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

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