Aerospace Dynamics will invest $145,000 in a project that win produce the follow
ID: 2760726 • Letter: A
Question
Aerospace Dynamics will invest $145,000 in a project that win produce the following cash flows The cost of capital is 9 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.) Should the project be undertaken? Yes NoExplanation / Answer
Project
Year
Cash flow
PV @ 9%
PV
0
(145,000)
1.0000
(145,000)
1
40,000
0.9174
36,697
2
55,000
0.8417
46,292
3
60,000
0.7722
46,331
4
(47,000)
0.7084
(33,296)
5
130,000
0.6499
84,491
NPV
35,516
a)Net Present Value=$35,516
b) Yes the Project can be undertaken as NPV is positive
Project
Year
Cash flow
PV @ 9%
PV
0
(145,000)
1.0000
(145,000)
1
40,000
0.9174
36,697
2
55,000
0.8417
46,292
3
60,000
0.7722
46,331
4
(47,000)
0.7084
(33,296)
5
130,000
0.6499
84,491
NPV
35,516
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.