xyz inc. is considering a new project with perpetual revenue of $650,000, cash costs of $420,000, and a tax rate of 35 percent. the firm plans to issue $350,000 of debt at an interest rate of 9 percent to help finance the initial project cost of $850,000. the levered discount rate is 12.5 percent. what is the net present value of this project? (do not round your intermediate calculations. round only your final answer up to 2 decimal places, if necessary. note: your final answer must be in dollars without the $ sign at the beginning)

Money earned from selling products and investment returns are examples of cash inflow. On the other hand, your operating expenses, debts, and other liabilities may all be included in your cash outflow.

Net cash inflow = (Revenue - cost - interest) x (1-tax rate) = ($650,000 - $420,000 - $350,000 x 9%) x (1-0.35) = ($650,000 - $420,000 - $31,500) x 0.65 = $198,500 x 0.65 = $129,025

$129,025 / 12.5% - $850,000 = $1,032,200 - $850,000 = 182,200.00

Is profit the same as net cash inflow?

No, the two metrics are very different from one another. Profit is the portion of your revenue that remains after costs are deducted, while cash flow is the money that enters and exits your business over a specific time period.

Learn more about net cash inflows here:

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