Question

Asked Nov 7, 2019

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Living Colour Co. has a project available with the following cash flows:

Year | Cash Flow | |

0 | −$35,070 | |

1 | 7,970 | |

2 | 9,570 | |

3 | 13,560 | |

4 | 15,610 | |

5 | 10,340 | |

If the required return for the project is 7.9 percent, what is the project's NPV?

Step 1

Net present worth of a project can be calculated by considering the present value of cashflows. Cashflows includes inflow and outflows both.

Step 2

Given:

Internal rate of return = 7.9%

Initial cost = $35,070

Cashflows from year 1 to year 5 =$7970, $9570, $13560, $15,610, and $10,340.

Step 3

Formula to calcula...

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