question archive Dowling Sportswear is considering building a new factory to produce aluminum baseball bats
Dowling Sportswear is considering building a new factory to produce aluminum baseball bats
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Dowling Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an initial cash outlay of ?$5 comma 000 comma 0005,000,000 and would generate annual net cash inflows of ?$1 comma 000 comma 0001,000,000 per year for 88 years. Calculate the? project's NPV using a discount rate of 99 percent.
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Answer:
Net present value = -$5,000,000 + $1,000,000/1.09 + $1,000,000/1.092 + $1,000,000/1.093 + $1,000,000/1.094 + $1,000,000/1.095 + $1,000,000/1.096 + $1,000,000/1.097 + $1,000,000/1.098
Net present value = $534,819.11
