A project has the following cash flows:
| PROJECT: | Initial Investment | Yearly Cash Flow | Square Footage Required |
|---|---|---|---|
| Project A | $4,000,000.00 | $450,000.00 | 75,000.00 |
| Project B | $6,000,000.00 | $700,000.00 | 200,000.00 |
The cost of capital is 10.00% for the firm. The analyst will assume that the cash flows for the project will continue forever.
What is the NPV for project B?
Answer Format: Currency: Round to: 2 decimal places.
NPV = present value of cash inflows - present value of cash outflows
NPV of project B = 700,000/10% - 6,000,000
=$1,000,000
A project has the following cash flows: PROJECT: Initial Investment Yearly Cash Flow Square Footage Required...