A project has an initial outlay of $1,032. It has a single payoff at the end of year 8 of $9,096. What is the net present value (NPV) of the project if the company’s cost of capital is 8.76 percent?

Round the answer to two decimal places.

Thank you for the opportunity to help you with your question!

PV = C/(1+r)^n

This is the formula for present value

C = is cash outflow

r = interest rate

n= # of periods

so for this the formula is $1,032/(1+.0876)^8

=$1,032/(1.0876)^8

=$1,032/1.95773

= $527.14

Sorry i misread the question

the formula should be

$9,096/(1.0876)^8

=4,646.19

then take the 4,646.19 and subtract the $1,032 = $3,614.19= Net Present Value

Peter

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