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Can you please confirm if my NPV calculation is correct?

Can you please confirm if my NPV calculation is correct? *this is a made up question by me to test my application of different scenarios*


Discount rate: 9%

Project length 10 years

Initial spend = $6million capex & $100k working capital to purchase new equipment


Free cash flow


Year 1: 740,000

Year 2: 756,800

Year 3: 774,104

Year 4: 791,927

Year 5: 810,285

Year 6: 829,193

Year7: 848,669

Year 8: 868,729

Year 9: 889,391

Year 10: 1,910,673 (made up of 910,673 cash flow plus $100k working capital and $900k salvage value of initial investment)


My answer is: $10,745,441

Top Answer

NPV =$5 612 530.26- 6 100 000=-$487 469.74... View the full answer

2 comments
  • Thank you! I have been able to adjust my calculations and am now getting the correct answer.
    • maddalynstephens
    • Dec 01, 2018 at 10:39pm
  • Glad for the positive feedback. You are most welcome !
    • bfacenjoro
    • Dec 01, 2018 at 10:41pm

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Other Answers

Your answer looks incorrect The... View the full answer

nvp.png

Discounti
Cashflow
ng factor
Year
Inflows
@ 90
Present Value
15 7 40 000 0 91743 6 78 898 . 20
2 5 7 , 56, 800 0.84168 6 36 983 . 42
3 5 7 74 104 0 . 772 18 5 97 , 747 63
4 5 7 91 927 0 . 70843 5...

2 comments
  • Thank you! I have been able to adjust my calculations and am now getting the correct answer.
    • maddalynstephens
    • Dec 01, 2018 at 10:39pm
  • Welcome dear
    • akgupta5122
    • Dec 02, 2018 at 12:46am

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