JFINEX Corporation is considering a new project that will cost 200,000. It will provide an annual cash flow of 90,000 annually for the next five years and will be sold for 50,000 at the end of year five. What is the NPV if the WACC is 10%?

JFINEX Corporation is considering a new project that will cost 200,000. It will provide an annual cash flow of 90,000 annually for the next five years and will be sold for 50,000 at the end of year five. What is the NPV if the WACC is 10%?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

JFINEX Corporation is considering a new
project that will cost 200,000. It will provide
an annual cash flow of 90,000 annually for
the next five years and will be sold for 50,000
at the end of year five.
What is the NPV if the WACC is 10%?

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