What is the NPV of the offer if the appropriate discount rate is 15 percent? (Ne
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Question
What is the NPV of the offer if the appropriate discount rate is 15 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))
What is the NPV of the offer if the appropriate discount rate is 21 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))
Suppose you are offered $9,800 today but must make the following payments:
Explanation / Answer
Year Cash Flows ($) Cell 0 $9,800 A2 1 -5,300 A3 2 -4,000 A4 3 -3,100 A5 4 -1,700 A6 IRR using excel formulae=IRR(A2:A6,0.01) 20% Year Cash Flows ($) PV@15% PV@21% 0 $9,800 9800 9800 1 -5,300 -4608.7 -4380.2 2 -4,000 -3024.6 -2732.1 3 -3,100 -2038.3 -1749.9 4 -1,700 -972.0 -793.1 NPV -843.6 144.8 Reject Accept PV Formulae=Amount/(1+Discount Rate in decimal)^Yeas
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