21-38 - 21-38 10 Cash Inflows Cash Outflows Net Cash...

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Unformatted text preview: 21-38 10 Cash Inflows Cash Outflows Net Cash Inflows (500,000) $(500,000) 1 – 12 years 260,000 (186,000) $ 74,000 Annual Net Cash Inflows----------------------------74,000 PV Factor for Annuity 12 periods 8%------------X 7,536 PV of Net Cash Inflows-----------------------------557,664 Initial Investment-------------------------------------(500,000) NPV-----------------------------------------------------57,664 IRR = 500,000 /74,000 = PV Factor of 6.76, yielding a return of 10.17% ...
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