You are evaluating the project with cash inflows as shown below. Your boss has a

Question

You are evaluating the project with cash inflows as shown below. Your boss has asked you to calculate the project's NPV. You don't know the project's initial cost, but you have been informed that the project's payback period is 3.5 years.

If the project's WACC is 11.3%, what is the NPV?

Please show your work... thank you very much in advance for your help!!!

You are evaluating the project with cash inflows as shown below. Your boss has asked you to calculate the project's NPV. You don't know the project's initial cost, but you have been informed that the project's payback period is 3.5 years. If the project's WACC is 11.3%, what is the NPV? Please show your work... thank you very much in advance for your help!!!

Explanation / Answer

since payback period = 3.5 years, Initial cost= 500+800+800+800/2= $2500 NPV= -2500+500/1.113+(800/1.113^2)+(800/1.113^3)+(800/1.113^$)+(600/1.113^5)= $47.898

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