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ra1l [238]
3 years ago
10

A project that provides annual cash flows of $16,800 for nine years costs $74,000 today. what is the npv for the project if the

required return is 8 percent?
Business
1 answer:
ExtremeBDS [4]3 years ago
6 0

Answer:

$30,947.92

Explanation:

The computation of the net present value is shown below:

= Present value of all yearly cash inflows after applying discount factor +  - initial investment  

where,  

The Initial investment is $74,000

All yearly cash flows would be

= Annual cost savings × PVIFA for 9 years at 8%  

= $16,800 × 6.2469

= $104,947.92

Refer to the PVIFA table

So, the net present value is

= $104,947.92 - $74,000

= $30,947.92

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Montano1993 [528]

Answer:

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