What is the net present value of the project

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1. Gomi Waste Disposal is evaluating a project that would require an initial investment of 53,300 dollars today. The project is then expected to produce annual cash flows that grow by 3.98 percent per year forever. The first annual cash flow is expected in 1 year and is expected to be 6,840 dollars. The project’s internal rate of return is 16.81 percent and its cost of capital is 14.81 percent. What is the net present value (NPV) of the project?

2. Gomi Waste Disposal is evaluating a project that would cost 43,900 dollars today. The project is expected to produce annual cash flows of 4,650 dollars forever with the first annual cash flow expected in 1 year. The NPV of the project is -1,043 dollars. What is the cost of capital of the project? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Reference no: EM132014411

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