Purchase Solution

# Calculating a Project's Net Present Value

Not what you're looking for?

Q. Company A wants a new business. The start up costs are \$23 million. The business is expected to get a net income of \$2.35 million per year for 13 years. The company uses straight line depreciation to zero salvage value for tax purposes. Assuming a 10% discount rate, what is the project's NPV?

##### Solution Summary

This solution shows how to calculate a project's net present value (NPV). The company uses straight line depreciation to zero salvage value for tax purposes.

##### Solution Preview

NPV = PV of annuity cash flows - initial investment

PV of ...

Solution provided by:
###### Education
• BE, Bangalore University, India
###### Recent Feedback
• "What does 1 and 0 means in the repair column?"
• "Went through all of the formulas, excellent work! This really helped me!"
• "try others as well please"
• "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."

##### Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

##### Motivation

This tests some key elements of major motivation theories.