Net present value Using a cost of capital of 11%, calculate the net present value for the project shown in the following table and indicate whether it is acceptable, The net present value (NPV) of the project is $. (Round to the nearest cent.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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### Investment Cash Flow Analysis

**Initial Investment (\(CF_0\)):**
- \(-1,150,000\) 

**Annual Cash Inflows (\(CF_t\)):**

- **Year 1**: $79,000
- **Year 2**: $140,000
- **Year 3**: $192,000
- **Year 4**: $252,000
- **Year 5**: $310,000
- **Year 6**: $379,000
- **Year 7**: $278,000
- **Year 8**: $103,000
- **Year 9**: $46,000
- **Year 10**: $25,000

This table outlines the cash inflows for a project over a 10-year period following an initial investment of \(-1,150,000\). The cash inflow increases from Year 1 to Year 6, reaching a peak at $379,000, and then gradually declines from Year 7 to Year 10. This can be used to analyze the payback period, return on investment, and overall financial feasibility of the project.
Transcribed Image Text:### Investment Cash Flow Analysis **Initial Investment (\(CF_0\)):** - \(-1,150,000\) **Annual Cash Inflows (\(CF_t\)):** - **Year 1**: $79,000 - **Year 2**: $140,000 - **Year 3**: $192,000 - **Year 4**: $252,000 - **Year 5**: $310,000 - **Year 6**: $379,000 - **Year 7**: $278,000 - **Year 8**: $103,000 - **Year 9**: $46,000 - **Year 10**: $25,000 This table outlines the cash inflows for a project over a 10-year period following an initial investment of \(-1,150,000\). The cash inflow increases from Year 1 to Year 6, reaching a peak at $379,000, and then gradually declines from Year 7 to Year 10. This can be used to analyze the payback period, return on investment, and overall financial feasibility of the project.
**Net Present Value**  

Using a cost of capital of 11%, calculate the net present value for the project shown in the following table and indicate whether it is acceptable.

---

The net present value (NPV) of the project is $______. (Round to the nearest cent.)
Transcribed Image Text:**Net Present Value** Using a cost of capital of 11%, calculate the net present value for the project shown in the following table and indicate whether it is acceptable. --- The net present value (NPV) of the project is $______. (Round to the nearest cent.)
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