Q2) Project Z has an initial investment of $88,193.00 . The project is expected to have cash inflows of $23,803.00 at the end of each year for the next 19.0 years. The corporation has a WACC of 14.09%. Calculate the NPV for project Z.
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=23803[1-(1.1409)^-19]/0.1409
=23803*6.517289515
=$155,131.04
NPV=Present value of inflows-Present value of outflows
=$155,131.04-$88193
which is equal to
=$66938.04(Approx).
Q2) Project Z has an initial investment of $88,193.00 . The project is expected to have...
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