Aerospace Dynamics will invest $160,000 in a project that will produce the appro

Question

Aerospace Dynamics will invest $160,000 in a project that will produce the approximate answer but calculate your final answer using the formula and fnancial calculator methods n a project that will produce the folowing cash fows. The cost of capital is 10 percent.(Note that the fourth year's cash flow is negative.) Use Appendx B for an 1$ 40,00 52,000 (45,000) 120,000 a. What is the net present value of the project? (Negative amount should be Indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal

Explanation / Answer

Statement showing Cash flows Particulars Time PVf 10% Amount PV Cash Outflows                              -                          1.00             (160,000.00)                (160,000.00) PV of Cash outflows = PVCO                (160,000.00) Cash inflows                         1.00                    0.9091                 40,000.00                     36,363.64 Cash inflows                         2.00                    0.8264                 52,000.00                     42,975.21 Cash inflows                         3.00                    0.7513                 52,000.00                     39,068.37 Cash inflows                         4.00                    0.6830               (45,000.00)                  (30,735.61) Cash inflows                         5.00                    0.6209               120,000.00                     74,510.56 PV of Cash Inflows =PVCI                  162,182.17 NPV= PVCI - PVCO                       2,182.17

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