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?ng.cengage.com e www.i hotmiamis... support.tu... MyUSF Module 5... MindTa..bst... Check My Work (3 remaining) 10 Click here to read the eBook: Net Present Value (NPV) 12 NPV 13 Project L costs $60,000, its expected cash inflows are $10,000 per year for 12 years, and its WACC is 11%. What is the project\'s NPV? Round your answer to the nearest cent. Do not round your intermediate 15 16. o calculations. 18

Solution

Net Present Value = Cash inflow – Cash outflow

If Net present value is positive then accept the project else reject the project

Year

Particulars

Cash flow

Present value factor @ 11%

Present value of Cash flows

0

Initial investment (outflow)

-60000

1

=60000*1

-60000

1-12

Annual cash inflows

10000

6.49236

=10000*6.49236

+69423.60

Net Present Value        

+9423.60

Year	Particulars	Cash flow	Present value factor @ 11%		Present value of Cash flows
0	Initial investment (outflow)	-60000	1	=60000*1	-60000
1-12	Annual cash inflows	10000	6.49236	=10000*6.49236	+69423.60
	Net Present Value				+9423.60