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a project has an initial cost of $36,875 expected net cash inflows of $15,000 per year...

a project has an initial cost of $36,875 expected net cash inflows of $15,000 per year for 12 years, and a cost of capital of 11%. what is the project's NPV?
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Answer #1

Ans:- NPV( Net Present Value) is given by ( Present Value of Cash Flow from year 1 to n - Initial Cost).

we will use the PV function of excel to find the Present Value. Initial Cost is given $36,875.The cost of capital is given 11%.

Rate =11%, Nper = 12 years, PV = -$15,000, FV = 0.

Present Value from year 1 to year 12 is $97,385.34.

Now NPV will be $97,385.34 - $36,875 =$60,510.34.

Therefore the NPV is $60,510.34.

Note:- If this answer helps you pls give thumbs up.

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