Wayne State Research Team has a project.

It requires $$400,000/$year investments for the next $4$ years.

On the $5$thyear it receives FCF of $$475,00.$

Then it grows by $5\mathrm{.}0\%$ a year indefinitely

EMU invests in projects that provide at least $15\mathrm{.}0\%$ a year return.

What is the NPV of Wayne State research project?

$5\%$

$0----------1----------2----------3----------4----------5----------6------------7------------$Infinity $$

NPV$=?-400$K $-400$K $-400$K $-400475$K $???$

HV$5=?$

Formula: Constant Growth: HV$5=$ CF$6-$: $[$WACC $$ g$]=[$CF$5$ x $(1+$ g$)]-$: $[$WACC $$ g$]$

Use TVM function of a Financial Calculator

Alternately, Use CF & NPV functions of a Financial Calculator