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14 WACC 11.50% Year Cash flow Discounted cash flow 0 -55000 -55000/(1+0.115)^(0) = -55000 1 18775 18775/(1+0.115)^(1)=16838.565 2. 27000 27000/(1+0.115)^(2)=21717.71 3 12000 12000/(1+0.115)^(3)= 8656.78525 4
14 WACC 11.50% Year Cash flow Discounted cash flow 0 -55000 -55000/(1+0.115)^(0) = -55000 1 18775 18775/(1+0.115)^(1)=16838.565 2. 27000 27000/(1+0.115)^(2)=21717.71 3 12000 12000/(1+0.115)^(3)= 8656.78525 4 23400 23400/(1+0.115)^(4)= 15139.6693 NPV 7352.72952 As NPV of the project is positive, the decision rule says that NPV>0, project should be taken hence company should take this project. 14 WACC 11.50% Year Cash flow Discounted cash flow 0 -55000 -55000/(1+0.115)^(0) = -55000 1 18775 18775/(1+0.115)^(1)=16838.565 2. 27000 27000/(1+0.115)^(2)=21717.71 3 12000 12000/(1+0.115)^(3)= 8656.78525 4 23400 23400/(1+0.115)^(4)= 15139.6693 NPV 7352.72952 As NPV of the project is positive, the decision rule says that NPV>0, project should be taken hence company should take this project
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Corporate Finance The Core
Authors: Jonathan Berk, Peter DeMarzo
4th Global Edition
1292158336, 9781292158334
