Question

What is the npv for a project whose cost of capital is 15 percent and initial after-tax cost is $5,000,000 and is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and $1,300,000 in year 4?.

Answer 1

The NPV for a project given its cost of capital, cost and cash inflows from year 1 to 4 is $-137,052.83

What is the NPV?

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

• Cash flow in year 0 = $-5,000,000
• Cash flow in year 1 = $1,800,000
• Cash flow in year 2 = $1,900,000
• Cash flow in year 3 = $1,700,000
• Cash flow in year 4 = $1,300,000

i = 15%

NPV = $-137,052.83

To learn more about net present value, please check: https://brainly.com/question/25748668

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