Homework SourseCompute the NPV statistic for Project Y if the appropriate c
Compute the NPV statistic for Project Y if the appropriate cost of capital is 10 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal place.)
| Compute the NPV statistic for Project Y if the appropriate cost of capital is 10 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal place.) |
Solution
Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)
=3730/1.1+4560/1.1^2+1900/1.1^3+680/1.1^4
=$9051.45
NPV=Present value of inflows-Present value of outflows
=$9051.45-$8500
=$551.45(Approx).
