USE THESE LINKS FOR FUTURE VALUE OF $1, PRESENT VALUE OF $1, ETC... http://lectu

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USE THESE LINKS FOR FUTURE VALUE OF $1, PRESENT VALUE OF $1, ETC...

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Citrus Company is considering a project that has estimated annual net cash flows of $32,000 for six years and is estimated to cost $150,000. Citrus's cost of capital is 8 percent. Determine the net present value of the project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answers to 2 decimal places.) Round your final answers to 2 decimal places Net Present Value

Explanation / Answer

Computation of net present value

Years Cash flows Discount@8% PV cash flows

1 53333 0.9259 49381   

2 53333 0.8573 45722

3 53333 0.7938 42336

4 53333 0.7350 39200

5 53334 0.6806 36299

6 53334 0.6302 33611

TotalPV cash flows 246549

less: initial investment (150000)

NPV 96549.

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