What is the project NPV

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Reference no: EM133101320

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1. An all-equity firm is analyzing a potential project that will require an initial, after-tax cash outlay of $50,000 and after-tax cash inflows of $6,000 per year for 10 years. In addition, this project will have an after-tax salvage value of $10,000 at the end of Year 10. If the market rate percentage was 12%, what is the project's NPV?

2. A project requiring a $180,000 initial investment will provide operating cash inflows of $55,000, $80,000, and $110,000 in each of the next years. The NPV of the project (at the firm's 12% cost of capital) is $18,867, and its IRR is 16%, so clearly the project is acceptable.

Reference no: EM133101320

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