A project has an initial cost of $35,700, expected net cash inflows of $13,000 p

Question

A project has an initial cost of $35,700, expected net cash inflows of $13,000 per year for 6 years, and a cost of capital of 10%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent. A project has an initial cost of $35,700, expected net cash inflows of $13,000 per year for 6 years, and a cost of capital of 10%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations. Round your answer to the nearest cent.

Explanation / Answer

Present value of inflows=$13000*Present value of annuity factor(10%,6)

=$13000*4.355260699

=$56618.39(Approx

NPV=Present value of inflows-Present value of outflows

=$56618.39-$35700

=$20918.39(Approx).

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