ome File Edit View History Bookmarks People Window H @ / D Connect Assignment #5

Question

ome File Edit View History Bookmarks People Window H @ / D Connect Assignment #5 (Sum × ? ? | ? ezto.mheducation.com/hm.tpx For the following set of cash flows, ear Cash Flow -$6,000 5,500 6,400 5,700 2 Required: (a) What is the NPV at a discount rate of O percent? (Click to select (b) What is the NPV at a discount rate of 11 percent? (Click to select) (c) What is the NPV at a discount rate of 18 percent? | (Click to select) (d) What is the NPV at a discount rate of 23 percent? (Click to select)

Explanation / Answer

a) NPV at 0% = (5500+6400+5700) - 6000

= 11600

b) NPV 11% = 9050

c) NPV 18% = 7334

d) NPV 23% = 6299.8

Cash flow PVF @ 11% PV PVF@18% PV PVF@23% PV Year 0 -6000 1.000 -6000 1.000 -6000 1.000 -6000 Year 1 5500 0.901 4955.5 0.847 4658.5 0.813 4471.5 Year 2 6400 0.812 5196.8 0.718 4595.2 0.661 4230.4 Year 3 6700 0.731 4897.7 0.609 4080.3 0.537 3597.9 NPV 9050 7334 6299.8

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