Get the best net present value on the right %

Net present value = expected cash inflows amount to be invested

Capital Budget Components Current cost of equity Current cost of debt Current cost of preferred stock Effective negotiated tax rate for project 990) 594 12.009 4096 $ Expected Cash Flows from Project Initial cost of project Project life cycle Year 1 Year 2 Year 3 Year 4 Year 5 19,500,000 5 years 8,325,000 6,000,000 5,500,000 2,000,000 1,500,000 $ S Present Value of $1 at Compound Interest Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 6% 0.943 0.89 0.84 0.792 0.747 0.705 0.665 0.627 0.592 0.558 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 Year 8 Year 9 Year 10