$1.$ EMU Research Team has a project.

$$ It requires $$400,000/$year investments for the next $4$ years.

$$ From the $5$ th year onwards, it receives FCF of $$475,00/$year for the next $10$ years $($i$.$e$.,$ year $5$ to $14)$

$$ EMU invests in projects that provide at least $15\mathrm{.}0\%$ a year return.

What is the NPV of EMU research project?

$012345.................\mathrm{.}14$

NPV$=?400$K $400$K $400$K $400475$K $................475$K

Use TVM function of a Financial Calculator

Alternately, Use CF & NPV functions of a Financial Calculator

$2.$ Wayne State Research Team has a project.

$$ It requires $$400,000/$year investments for the next $4$ years.

$$ On the $5$ th year it receives FCF of $$475,00.$

$$ Then it grows by $5\mathrm{.}0\%$ a year indefinitely

$$ EMU invests in projects that provide at least $15\mathrm{.}0\%$ a year return.

What is the NPV of Wayne State research project?

$5\%$

$01234567$Infinity $$

NPV$=?400$K $400$K $400$K $400475$K $???$

HV $5=?$

Formula: Constant Growth: HV$5=$ CF $6-$: $[$WACC $$ g$]=[$CF$5$ x $(1+$ g$)]-$: $[$WACC $$ g$]$

Use TVM function of a Financial Calculator

Alternately, Use CF & NPV functions of a Financial Calculator