Quiz Page 34 of 34 Previous Page Next Page Note: It is recommended that you save
ID: 2791265 • Letter: Q
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Quiz Page 34 of 34 Previous Page Next Page Note: It is recommended that you save your response as you complete each question Question 34 (2.5 points) A firm is evaluating a project with an initial cost of 934,807 and annual cash inflows of 245,835 per year (first cash flow to be received exactly one year from today) for each of the next 5 years. If the cost of capital for this project is 9 %, what is this project's NPV? Round your answer to 2 decimal places and record without a doillar sign and without any commast your snswer is a negative value enter a minus sign before your number with no space between the sign and the numbers Your Answer: Answer Save Page 34 of 34 Previous Page Next PageExplanation / Answer
Computation of Net present value
Initial Investment $934807
Cash inflows $245835
Cost of capital 9%
Number of years 5 years
PV of annuity 3.88965
Ney present value = Cash inflows - Cash outflows
= $245835 * 3.88965 - $934807
= $956212 - $934807
= $21405.
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