Company XYZ is considering an investment project that is expected to generate the following cash flows: Year
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Question:
Company XYZ is considering an investment project that is expected to generate the following cash flows:
Year 1: $500,000
Year 2: $700,000
Year 3: $800,000
Year 4: $900,000
Year 5: $1,200,000
The cost of capital for the company is 10%. Calculate the Firm's Present Value (FPV) of the cash flows.
To calculate the Firm's Present Value (FPV) of the cash flows, you need to discount each cash flow to its present value using the cost of capital, and then sum up the present values of all cash flows.
Related Book For
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
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