Question: Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the

Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the projects net present value (NPV). You dont know the projects initial cost, but you do know the projects regular, or conventional, payback period is 2.50 years.
Year
Cash Flow
Year 1 $325,000
Year 2 $500,000
Year 3 $475,000
Year 4 $425,000
If the projects weighted average cost of capital (WACC) is 8%, the projects NPV (rounded to the nearest dollar) is:
$392,208
$410,036
$356,553
$338,725

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!