Question
A firm is considering a project that costs $165,000 to start and generates $28,000/year in after-tax cash for the next 8 years. After 8 years
A firm is considering a project that costs $165,000 to start and generates $28,000/year in after-tax cash for the next 8 years. After 8 years there are no additional cash flows or salvage value. The firm uses a 15% cost of capital. Build a spreadsheet model to estimate the net present value of the project.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the net present value NPV of the project we need to discount each years cash flow ...
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Step: 2
Step: 3
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
6th Canadian edition
1259024962, 978-1259024962
