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NPV of Project with Cost of Capital

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A firm must spend $ 10 millions today in a project. That is expected to bring in annual revenues of $1.5 millions for the next 10 years (beginning at the end of year 1).The firm cost of capital is 5%, what is the NPV of this project?

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A firm must spend $ 10 millions today in a project .
That is expected to bring in annual revenues of $1.5 millions for the next 10 years (begining at the end of year 1).The firm cost of capital is 5%, what is the NPV of this project?

Since the ...

Solution Summary

NPV of project is calculated by discounting the cashflows.

$2.19