You are analyzing a project and have prepared the following data:
Year Cash flow
0 -$169,000
1 $46,200
2 $87,300
3 $41,000
4 $39,000
The WACC is 8.50%. What is the project s NPV? Will you accept or reject the project? Explain.
ABC Service can purchase a new assembler for $15,052 which will provide an annual net cash flow of $6,000 per year for five years. Calculate the NPV of the assembler if the required rate of return is 12%.
Artie’s Soccer Ball Company is considering a project with the following cash flows:
| Initial outlay | $750,000 |
| Incremental after-tax cash flows from operations Years 1-4 | $250,000 per year |
Compute the NPV of this project if the company’s discount rate is 12%.
Your firm is considering a project that has the following set of cash flows. If the required rate of return for the project is 10%, find the net present value.
| Year | Cash Flow |
| 0 | -$35,000 |
| 1 | 10,000 |
| 2 | 20,000 |
| 3 | 10,000 |
| 4 | 30,000 |
The following present value factors are provided for use in this problem.
| Periods | Present Value of $1 at 8% | Present Value of an Annuity of $1 at 8% |
| 1 | 0.9259 | 0.9259 |
| 2 | 0.8573 | 1.7833 |
| 3 | 0.7938 | 2.5771 |
| 4 | 0.7350 | 3.3121 |
Xavier Co. wants to purchase a machine for $38,000 with a four-year life and a $1,100 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $13,000 in each of the four years.
What is the machine’s net present value?
