Calculate the net present value of project cash flows


1.) Calculate the Net Present Value (NPV) of the following project cash flows. The applicable discount rate is 11%.

Year 0: ($25,000)

Years 1-4: $9,000

A.) $2,922.01

B.) $11,000.00

C.) $11,000.00

D.) $36,000.00

2.) Calculate the Net Present Value (NPV) of the following project cash flows. The applicable discount rate is 11%.

Year 0: ($80,000)

Years 1-4: $30,000

A.) $120,000.00

B.) $40,000.00

C.) $13,073.37

D.) $93,073.37

3.) The following data has been compiled for a potential capital project:

$425,000 - Cost of New Equipment
50,000 - Resale of old equipment
75,000 - Salvage value of new equipment
150,000 - Annual Revenues for each of 10 years
35,000 - Additional annual costs for each of 10 years
10 years - Life of equipment
DDB - Double Declining Balance depreciation method
35.0% - Income tax rate
9.4% - Required Rate of Return

What is the Net Present Value (NPV) of the investment and the IRR?

A.) $520,000.00 and 11.9%

B.) $17,285.87 and 9.4%

C.) $47,827.21 and 11.9%

D.) $422,827.21 and 9.4%

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Accounting Basics: Calculate the net present value of project cash flows
Reference No:- TGS0677878

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