Question

For the following set of cash flows,    Year Cash Flow 0 –$8,000            1 3,400...

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?

Homework Answers

Answer #1

NPV - Pv of cash inflows- PV of cash outflows

Year CF PVF@0% Disc CF PVF@9% Disc CF PVF@21% Disc CF PVF@26% Disc CF
0 $ -8,000.00 1 -8000 1 $ -8,000.00 1 $ -8,000.00 1 $ -8,000.00
1 $ 3,400.00 1 3400 0.9174 $ 3,119.27 0.8264 $ 2,809.92 0.7937 $ 2,698.41
2 $ 6,100.00 1 6100 0.8417 $ 5,134.25 0.6830 $ 4,166.38 0.6299 $ 3,842.28
3 $ 3,800.00 1 3800 0.7722 $ 2,934.30 0.5645 $ 2,145.00 0.4999 $ 1,899.64
NPV 5300 $ 3,187.81 $ 1,121.30 $     440.33

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