Dowling Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an initial cash outlay of$ 6,000,000 and would generate annual net cash inflows of $1,200,000 per year for 6 years. Calculate the project's NPV using a discount rate of 8 percent.
If the discount rate is 8 percent, then the project's NPV is $_ ?
| PV of annual net cash inflows = 1200000*(1.08^6-1)/(0.08*1.08^6) = | $ 55,47,455.60 |
| Less: Initial invesment | $ 60,00,000.00 |
| NPV | $ -4,52,544.40 |
Dowling Sportswear is considering building a new factory to produce aluminum baseball bats. This project would...