Ask Experts Questions for FREE Help !
Ask
    PhillySportsFan's Avatar
    PhillySportsFan Posts: 18, Reputation: 1
    New Member
    		  
    #1

    Jun 23, 2012, 03:26 PM
    What is the net present value of the project?
    A project has estimated annual cash flows of $95,000 for four years and is estimated to cost $260,000. Assume a minimum acceptable rate of return of 12%.

    Below is a table for the present value of $1 at compound interest.

    Year 12%
    1 .893
    2 .797
    3 .712
    4 .636

    Below is a table for the present value of an annuity of $1 at compound interest.

    Year 12%
    1 .893
    2 1.690
    3 2.402
    4 3.037
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
    		  
    #2

    Jun 23, 2012, 03:42 PM
    Very interesting now apply yourself and do the math
    PhillySportsFan's Avatar
    PhillySportsFan Posts: 18, Reputation: 1
    New Member
    		  
    #3

    Jun 24, 2012, 10:53 AM
    Hey guess what, how about you stop talking to me. Thanks man, appreciate it.
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
    		  
    #4

    Jun 24, 2012, 05:25 PM
    Fine by me, your loss
    PhillySportsFan's Avatar
    PhillySportsFan Posts: 18, Reputation: 1
    New Member
    		  
    #5

    Jun 24, 2012, 08:41 PM
    You weren't going to help me anyway.
    PhillySportsFan's Avatar
    PhillySportsFan Posts: 18, Reputation: 1
    New Member
    		  
    #6

    Jun 24, 2012, 08:44 PM
    All you do is take $95,000 times 3.037 which equals $288,515 and subtract that from $260,000 which equals $28,515 which ends up being the net present value of the project.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Net Present Value? [ 0 Answers ]

Determine the net present value, cash cost $220,000, net annual cash flows $40,000, present value factor of cash inflows for ten years 5065.

What is the net present value of this expansion project? [ 1 Answers ]

Required rate of return is 16%, operating cash flow is 26000, working capital 3000, and expect operating cash flows of 26000 for 4years?

Net present value [ 1 Answers ]

In eight years, Kent Duncan will retire. He is exploring the possibility of opening a self-service car wash. The car wash could be managed in the free time he has available from his regular occupation, and it could be closed easily when he retires. After careful study, Mr Duncan has detrmined the...

Calculate net present value of the project? [ 5 Answers ]

cpmpany Xis considering launching an inoovative producti.e glass used in TV sets company X has invested £500,000 to date in developing products the market research report commissioned by the firm indicates the product will have a 4year life the equipment required to manufacture the products...

Net Present Value [ 1 Answers ]

Your company plans to acquire one of two assets. Asset A costs $162,500, and has expected annual cash savings of $37,500. Asset B costs $225,000, and has expected annual cash savings of $77,500. You'll use straight-line depreciation for both assets over their estimated useful lives of 5 years,...

View more questions Search