Babcock Inc. is considering a project that has the following cash flow and WACC data. What...

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Question

Babcock Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
WACC:	10%
Year:	0	1	2	3
Cash flows:	-$1,250	$400	$500	$600

business finance

Answer 1

Answer #1

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=400/1.1+500/1.1^2+600/1.1^3

=1227.65

NPV=Present value of inflows-Present value of outflows

=1227.65-1250

=-22.35(Approx)(Negative)

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Answer 2

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