# NPV (Net Present Value) of a Project

A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital of 12%. What is the project's NPV?

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Answer:

A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital of 12%. What is the project's NPV?

Since the cash flows are the same over the years (annuity) we can use PVIFA factor to calculate NPV

PVIFA= Present Value Interest Factor for an Annuity

It can be read from tables or calculated using the following equations

PVIFA( n, ...

#### Solution Summary

The solution calculates the NPV (Net Present Value) of a Project.

$2.19