Question

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?

Answer #1

a.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=6,700+6,800+6,100

=$19600

NPV=Present value of inflows-Present value of outflows

=19600-8,000

**=$11600**

b.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=6,700/1.12+6,800/1.12^2+6,100/1.12^3

=$15744.92

NPV=Present value of inflows-Present value of outflows

=15744.92-8,000

**=$7744.92(Approx)**

c.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=6,700/1.18+6,800/1.18^2+6,100/1.18^3

=$14274.27

NPV=Present value of inflows-Present value of outflows

=14274.27-8,000

**=$6274.27(Approx)**

d.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=6,700/1.23+6,800/1.23^2+6,100/1.23^3

=$13219.88

NPV=Present value of inflows-Present value of outflows

=13219.88-8,000

**=$5219.88(Approx)**

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?

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...

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
–$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
–$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 -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?

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...

What is the profitability index for the following set of cash
flows if the relevant discount rate is 10 percent? What if the
discount rate is 15 percent? If it is 22 percent? Year Cash
Flow
0 -16,700
1-9,700
2 -7,800
3 - 4,300

What is the IRR of the following set of cash flows?
Year Cash Flow
0 -11,109
1 4,500
2 6,800
3 5,500
A) 21.85%, B) 23.46%, C) 23%, D) 24.15%, E) 22.54%

A firms evaluates all of its projects by using the NPV decision
rule. Year,0,1,2,3,cash flow -30,000,20,000,13,000,5,000.(a) at a
required return of 17 percent, what is the NPV for this project?
(B) at a required return of 37 percent, what is the NPV for this
project?

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