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Project L costs $50,000, its expected cash inflows are $15,000 per year for 11 years, and...

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Finance

Project L costs $50,000, its expected cash inflows are $15,000per year for 11 years, and its WACC is 10%. What is the project'sNPV? Round your answer to the nearest cent. Do not round yourintermediate calculations.

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3.8 Ratings (699 Votes)
Project L Given information Cost of project L 50000 Expected cash flows 15000 per year NO of years 11 years WACC 10 NPV is net present value of project where it is a difference between projects present value of cash outflows and projects present value of cash inflows To calculate present value we have given WACC ie weighted average cost of capital as 10 and by considering this WACC we will calculate present value factors so that we can get present value of cash flows Present value factor formula is 11rn Now we will calculate this present value factors for 11 years These factors will be rounded off to 4 decimal places    See Answer
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