Question

For the following set of cash flows.

Year Cash Flow

0 -6,700

1 6,600

2 5,600

3 3,000

A) What is the NPV at a discount rate of 0 percent?

B) What is the NPV at a discount rate of 13 percent?

C) What is the NPV at a discount rate of 21 percent?

D) What is the NPV at a discount rate of 26 percent?

Answer #1

Years | Cash flow | Discount factor | Present Value | Discount factor | Present Value | Discount factor | Present Value | Discount factor | Present Value |

@0% | @13% | @21% | @26% | ||||||

a | b | c=1.0^-a | b*c | d=1.13^-a | b*d | e=1.21^-a | b*e | f=1.26^-a | b*f |

0 | $ -6,700 | 1.000 | $ -6,700 | 1.000 | $ -6,700 | 1.000 | $ -6,700 | 1.000 | $ -6,700 |

1 | $ 6,600 | 1.000 | $ 6,600 | 0.885 | $ 5,841 | 0.826 | $ 5,455 | 0.794 | $ 5,238 |

2 | $ 5,600 | 1.000 | $ 5,600 | 0.783 | $ 4,386 | 0.683 | $ 3,825 | 0.630 | $ 3,527 |

3 | $ 3,000 | 1.000 | $ 3,000 | 0.693 | $ 2,079 | 0.564 | $ 1,693 | 0.500 | $ 1,500 |

NPV |
$ 8,500 |
$ 5,605 |
$ 4,273 |
$ 3,565 |
|||||

Thus, | |||||||||

A) | NPV | $ 8,500 | |||||||

B) | NPV | $ 5,605 | |||||||

C) | NPV | $ 4,273 | |||||||

D) | NPV | $ 3,565 |

For the following set of cash
flows,
Year
Cash Flow
0
–$7,300
1
6,500
2
5,200
3
6,700
Required:
(a)
What is the NPV at a discount
rate of 0 percent?
(b)
What is the NPV at a discount
rate of 14 percent?
(c)
Whatis the NPV at a discount rate of 21 percent?
(d)
What is the NPV at a discount
rate of 26 percent?

For the following set of cash flows,
Year
Cash Flow
0
–$8,000
1
3,400
2
6,100
3
3,800
a. What is the NPV at a discount rate of 0 percent?
b. What is the NPV at a discount rate of 9 percent?
c. What is the NPV at a discount rate of 21 percent?
d. What is the NPV at a discount rate of 26 percent?

For the following set of cash flows,
Year
Cash Flow
0
–$6,800
1
3,800
2
3,700
3
5,000
a. What is the NPV at a discount rate of 0 percent?
b. What is the NPV at a discount rate of 12 percent?
c. What is the NPV at a discount rate of 24 percent?
d. What is the NPV at a discount rate of 29 percent?

For the following set of cash flows,
Year
Cash Flow
0
–$9,700
1
4,100
2
3,400
3
4,400
a. What is the NPV at a discount rate of 0 percent?
2,200.00
$2,266.00
$2,310.00
$2,090.00
$2,134.00
b. What is the NPV at a discount rate of 15 percent?
$-670.82
$-690.95
$-704.36
$-637.28
$-650.70
c. What is the NPV at a discount rate of 23 percent?
$-1,754.84
$-1,807.48
$-1,842.58
$-1,667.10
$-1,702.19
d. What is...

For the following set of cash flows,
Year
Cash Flow
0
–$7,700
1
3,800
2
3,300
3
3,700
Required:
(a)
What is the NPV at a discount rate of 0 percent?
(Click to select)$3,100.00$3,255$3,007$3,193$2,945
(b)
What is the NPV at a discount rate of 11 percent?
(Click to
select)$1,162.54$1,140.4$1,051.83$1,107.19$1,073.97
(c)
What is the NPV at a discount rate of 24 percent?
(Click to select)$-548.68$-565.14$-576.11$-606.9$-521.25
(d)
What is the NPV at a discount...

1.
What is the payback period for the following set of cash
flows?
Year
Cash Flow
0
−$ 8,000
1
2,800
2
1,000
3
2,900
4
2,100
Multiple Choice
3.57 years
3.80 years
3.64 years
3.92 years
3.62 years
2.
An investment project provides cash inflows of $650 per year
for 8 years.
a. What is the project payback period if the
initial cost is $3,250?
b. What is the project payback period if...

Year
Cash Flow
0
−$8,400
1
5,600
2
3,600
3
5,100
a. What is the profitability index for the cash
flows if the relevant discount rate is 9 percent?
b. What is the profitability index for the cash
flows if the relevant discount rate is 15 percent?
c. What is the profitability index for the cash
flows if the relevant discount rate is 22 percent?

For the following set of cash flows, year,0,1,2,3,cash
flow,-8,000,6,700,6,800,6,100(a) what is the NPV at a discount rate
of 0 percent?(b) what is the NPV at a discount rate of 12 percent?
(C) what is the NPV at a discount rate of 18 percent? (D) what is
the NPV at a discount rate of 23 percent?

What is the IRR of the following set of cash flows?
Year
Cash Flow
0
–$9,791
1
6,700
2
4,200
3
3,500

Year 0 = Cash Flow -$16,700 Year 1 = Cash Flow $9,700 Year 2 =
Cash Flow $7,800 Year 3 = Cash Flow $4,400
What is the profitability index for the set of cash flows if the
relevant discount rate is 10 percent? What is the profitability
index for the set of cash flows if the relevant discount rate is 15
percent? What is the profitability index for the set of cash flows
if the relevant discount rate is 22...

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