Problem 9LO332 similar to Question Help The Rolins Supply Co

Problem 9.LO3.32 (similar to) Question Help The Rolins Supply Company is considering an expansion project with cash fows as shown below. The cost of capital is 8%. Calculate the present value (NPV), profitability index (PI), and internal rate of return (IRR) for this project Cash Flow -$2,600 $1,800 $1,700 $1,400 $1.200 $1,400 Year What is the project\'s NPV? (Round to the nearest cent)

Solution

Year cash flows PVf @ 8% Present value 0 -2600 1 -2600 1 1800 0.925926 1666.667 2 1700 0.857339 1457.476 3 1400 0.793832 1111.365 4 1200 0.73503 882.0358 5 1400 0.680583 952.8165 Net present value 3470.36