A project brings the cash flow

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Reference no: EM131250920

A project brings the following cash flow to the company. The company uses its WACC (weighted-average cost of capital) as discount rates at 12%.

Years Start CF Growth Rate

1-3 $100,000 2%

4-6 $200,000 8%

7- 10 $80,000 1%

(1) What is the present value of cash flows from Year 1 to 3?

(2) What is the present value of cash flows from year 4 to 6? (Hint: Discount back to PRESENT, not year 4)

(3) What is the present value of cash flows from year 7 to 10?

(4) What is the PV of this project?

Reference no: EM131250920

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