29. Consider a project with the following cash flows Year t=0 $7,500 $12.500 S15

Question

29. Consider a project with the following cash flows Year t=0 $7,500 $12.500 S15,000 $17,500 The Payback Period of this project is 2.5 years. The appropriate discount rate is 13%. Find the Net sent Value of the project. (Note that the cash flow for t-0 is not provided to you -that is, you must first solve for it) 30. If the cost of capital for the project shown below is 3.5 percentage points less than the project's IRR (for example, if the project's IRR is 12%, the cost of capital is 8.5%), what is the NPV of the project? Cash Flow (S210,000) $40,000 $50,000 $60,000 $60,000 $70,000 $70,000 Year 4

Explanation / Answer

29.

investment amount in year 0=7500+12500+0.5*15000=27500

net present value=-27500+7500/1.13^1+12500/1.13^2+15000/1.13^3+17500/1.13^4

=10055.33

the above is the answer

we do only one question based on Chegg rule.

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