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Town Inc is considering investing in a project with the following expected cash flows: -111, 12,...

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Finance

Town Inc is considering investing in a project with thefollowing expected cash flows: -111, 12, 26, 33. If Town Incexpected cost of capital is 0.18, what is the expected NPV of theproject?

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3.9 Ratings (621 Votes)

Ans -$62.07 (Negative)

Year Project Cash Flows (i) DF@ 18% DF@ 18% (ii) PV of Project A ( (i) * (ii) )
0 -111 1 1                         (111.00)
1 12 1/((1+18%)^1) 0.847                             10.17
2 26 1/((1+18%)^2) 0.718                             18.67
3 33 1/((1+18%)^3) 0.609                             20.08
NPV                           (62.07)

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Transcribed Image Text

Town Inc is considering investing in a project with thefollowing expected cash flows: -111, 12, 26, 33. If Town Incexpected cost of capital is 0.18, what is the expected NPV of theproject?

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