East Coast Television is considering a project with an initial outlay of X( you

Question

East Coast Television is considering a project with an initial outlay of X( you have to determine the amount). It is expected that the project will produce a postive cash flow of 47,000 a year at the end of each year for the next 14 years. The appropriate discount rate for this project is a 9 percent. If the project has internal rate of return of 11 percent what is the project net present value.

A) If the project has an internla rate of return 11% the the projects intital outlay is ____( Round to the nearst cent)

Explanation / Answer

If the project has an internla rate of return 11% the the projects intital outlay is ____( Round to the nearst cent)

projects intital outlay = pv(rate,nper,pmt,fv)

projects intital outlay = pv(11%,14,47000,0)

projects intital outlay = $ 328,147.67

Present value using discount rate 9%

Present value of cash inflow =pv(rate,nper,pmt,fv)

Present value of cash inflow =pv(9%,14,47000,0)

Present value of cash inflow = $ 365,949.07

Project net present value = Present value of cash inflow - projects intital outlay

Project net present value = 365949.07 - 328147.67

Project net present value = $ 37,801.40

Answer

Projects intital outlay = $ 328,147.67

Project net present value = $ 37,801.40

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.