Net Present Value and Washington State University - 740 Words

Washington State University Finance 325 Practice Problems 1. What is the net present value of a project with the following cash flows and a required return of 12 percent? Year 0 1 2 3 Cash Flow -$28,900 $12,450 $19,630 $ 2,750 2. What is the net present value of a project that has an initial cash outflow of $12,670 and the following cash inflows? The required return is 11.5 percent. Year 1 2 3 4 Cash Inflows $4,375 $ 0 $8,750 $4,100 3. A project will produce cash inflows of $1,750 a year for four years. The project initially costs $10,600 to get started. In year five, the project will be closed and as a result should produce a cash inflow of $8,500. What is the net present value of this project if the required rate of†¦show more content†¦The equipment will be depreciated straight-line to a zero book value over the life of the project. The equipment will be salvaged at the end of the project creating a $25,000 after-tax cash flow. At the end of the project, net working capital will return to its normal level. What is the net present value of this project given a required return of 14 percent? Answer Keys 1. NPV = −$28,900 + $12,450 $19,630 $2,750 ; NPV = -$177.62Show MoreRelatedShould Marijuana Be Legal?1324 Words   |  6 Pagesvaporization devices, and eating capsules or consuming oral sprays. Dronabinol and nabilone are several synthetic cannabinoids that have first entered the market of the early 21st century. These synthetic prescription drugs are present in countries including the United States, Canada, Mexico, and the United Kingdom. As far as intended use, marijuana is usually for appetite stimulation, antiemetic, and antispasmodic purposes. A powerful analgesic effect comes after the consumption of most if not allRead MoreBenefits And Benefits Of Recycling871 Words   |  4 Pagesproducts that can be beneficial to society and the environment. 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