What is the Net Present Value (NPV) for the cash flows provided in the table below?
Note: The negative cash flow for year 0 is the initial investment for the project. The required rate of return is 8% and the internal rate of return is 9.70%.
Year Cash Flow
0 -$100,000
1 $40,000
2 $40,000
3 $40,000
A) $0.00
B) $100,000.00
C) $3,083.88
D) -$103,083.88
C
Explanation: C) Via Calculator: N = 3, I = 8, PMT = 40,000, FV = 0, PV = $103,083.88, NPV = PV - Initial investment = $103,083.88 - $100,000 = $3,083.88.
You might also like to view...
Why you should begin the organizational process by arranging your materials into clusters of main and subordinate ideas?
What will be an ideal response?
If a statute or government regulation enacted after a contract's creation makes performance of a party's contractual duties illegal, the promisor is excused from performing.
Answer the following statement true (T) or false (F)
What is the correct order of the following events in the accounting process? I. Financial statements are prepared. II. Adjusting entries are recorded. III. Nominal accounts are closed
a. I, II, III b. II, I, III c. III, II, I d. II, III, I
The most important problems with corporate codes of conduct are:
A. Content and enforcement B. Publicity and content C. Too few participating employers and enforcement D. Complexity and publicity