I need help with 4-7 4 A project that provides anmual cash flows of $2,880 for t

Question

I need help with 4-7

4 A project that provides anmual cash flows of $2,880 for the first five years and $2,110 for the next three years costs $3.400 today. At a required return of 9.2%, what is the NPV of the project? 5 An investment project that costs $45,000 provides cash inflows of $7,180 in year 1: $9,560 in year 2$10,820 in year 3, $7,380 in year 4 and $9,230 in year 5. What is the NPV of the project if the cost of capital is 7.1 %? 6 An investment project that costs S12,350 provides cash flows af $13,600 in year 1 ; $19,560 in year 2;-$8,820 in year 3.-S5380 in year 4, and $8,230 in year 5 . what is the NPV of the project if the cost of capital is 8.6%? (Hint: note that negatve sign in the cash flows for year 3 & 4, means they are cash outfiow 7 In question #6 above, do you accept or reject the project? Enter 1 if accept o if reject.

Explanation / Answer

4)

Year Cash flow PVF@9.20% Present value 0 $             (9,400) 1.0000 $         (9,400.00) 1 $               2,880 0.9158 $           2,637.36 2 $               2,880 0.8386 $           2,415.17 3 $               2,880 0.7679 $           2,211.69 4 $               2,880 0.7032 $           2,025.36 5 $               2,880 0.6440 $           1,854.72 6 $               2,110 0.5897 $           1,244.36 7 $               2,110 0.5401 $           1,139.53 8 $               2,110 0.4946 $           1,043.52 Net present value $           5,171.71

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

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