Calculate net present value of the project

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Reference no: EM131901082

A) Suppose a project is expected to generate annual cash flow of $164333 next year and subsequent (annual) cash flows are expected to grow at 2.7 percent annually.forever. If project costs $560,000 and the cost of capital is 15.0 percent, calculate the net present value of the project.

B) Suppose a project is expected to generate annual cash flow of $163513×1.25 next year, $163513×1.25×1.25 (i.e. 163513 × 1.25 squared) the year after, and the subsequent (annual) cash flows are expected to grow at 2.7 percent annually.forever. If project costs $560,000 and the cost of capital is 15.2 percent, calculate the net present value of the project.

Reference no: EM131901082

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