Living Colour Co has a project available with the following

Living Colour Co. has a project available with the following cash flows:

If the required return for the project is 8.9 percent, what is the project\'s NPV?

$12,099.35

$25,980.00

$13,107.63

$13,827.83

$4,956.39

Solution

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=8270/1.089+9970/1.089^2+14260/1.089^3+16010/1.089^4+10940/1.089^5

=$45569.35

NPV=Present value of inflows-Present value of outflows

=$45569.35-$33470

which is equal to

=$12099.35(Approx).