# Question: A project has an NPV of 50 000 Calculate the cost

A project has an NPV of $50,000. Calculate the cost of capital of this project if it generates the following cash flows for six years after an initial investment of $200,000:

Year 1: $50,000

Year 2: $50,000

Year 3: $30,000

Year 4: $80,000

Year 5: $60,000

Year 6: $70,000

Year 1: $50,000

Year 2: $50,000

Year 3: $30,000

Year 4: $80,000

Year 5: $60,000

Year 6: $70,000

**View Solution:**## Answer to relevant Questions

Based on the cash flows given below, calculate the PI of a project that has a required rate of return of 15 percent. Also, indicate whether the project should be accepted.Year 0: –$90,000 Year 1: $20,000Year 2: $40,000 ...Your truck has a market value of $60,000. You can sell it to your brother who agreed to buy it now and pay $75,000 three years from now, or you can sell it to your cousin who agreed to pay you $65,000 at the end of the year. ...A firm is considering two mutually exclusive projects, as follows. Determine which project should be accepted if the discount rate is 15 percent. Use the chain replication approach. Assume both projects can bereplicated.Using NPV, should you invest in a project where the initial cash outflow is $25,000 and the cash inflow in the first year is $2,000 and “grows” at a rate of 2 percent thereafter? Assume cost of capital is 10 percent.Complete the following table. Assume that the asset class is left open, and/or the salvage value is less than the UCC for the entireclass.Post your question