Walrus World will invest $156,000 in a project that will produce the following c

Question

Walrus World will invest $156,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Note that the fourth year’s cash flow is negative.) Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

  

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 places.)

Year Cash Flow 1 $ 52,000 2 62,000 3 56,000 4 (55,000 ) 5 120,000

Explanation / Answer

We will solve this function using Financial calculator

Use the Cash Flow Function.

Enter CF0= -156,000, CF1= 52,000, CF2=62,000, CF3= 56,000, CF4=-55,000, CF5=120,000

Then Enter I = 10%. Solve for NPV.

NPV= $17,098.11085

Answer: Net Present Value= $17,098.11

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

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