Step by step on how to answer these questions please. Question 1 Find the net pr

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Step by step on how to answer these questions please.

Question 1

Find the net present value (NPV) for the following series of future cash flows, assuming the company’s cost of capital is 8.12 percent. The initial outlay is $329,504.

Year 1: 143,786

Year 2: 156,885

Year 3: 130,736

Year 4: 186,249

Year 5: 145,388

Round the answer to two decimal places.

Answer:

Tall Trees, Inc. is using the net present value (NPV) when evaluating projects. You have to find the NPV for the company’s project, assuming the company’s cost of capital is 7.21 percent. The initial outlay for the project is $490,314. The project will produce the following after-tax cash inflows of

Year 1: 139,196

Year 2: 163,910

Year 3: 127,376

Year 4: 145,343

Round the answer to two decimal places.

Answer:

Green Landscaping, Inc. is using net present value (NPV) when evaluating projects. Green Landscaping’s cost of capital is 13.79 percent. What is the NPV of a project if the initial costs are $1,718,510 and the project life is estimated as 12 years? The project will produce the same after-tax cash inflows of $623,397 per year at the end of the year.

Round the answer to two decimal places.

Answer:

A project has an initial outlay of $3,493. It has a single payoff at the end of year 9 of $9,374. What is the net present value (NPV) of the project if the company’s cost of capital is 9.51 percent?

Round the answer to two decimal places.

Answer:

Step by step on how to answer these questions please.

Question 1

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Explanation / Answer

1.

2.

3.

Present Value of Cash Inflows = 623,397*5.713 = $3561467.06

NPV = Present Value of Cash Inflows - Cash Ouflows = 3561467.06 - 1718510 = $1842957.06

4.

Present Value of Cash Inflow = 9374*0.441 = $4133.93

NPV = Present Value of Cash Inflow - Cash Outflow = 4133.93 - 3493 = $640.93

Year Cash Flow PVF @ 8.12% Present Value 0 -329504 1 -329504 1 143786 0.925 133002.05 2 156885 0.855 134136.68 3 130736 0.791 103412.18 4 186249 0.732 136334.27 5 145338 0.677 98393.83 NPV 275775.01

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