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.
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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
Sorry i misread the question
the formula should be
then take the 4,646.19 and subtract the $1,032 = $3,614.19= Net Present Value
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