What is the NPV at a discount rate of zero percent? ( Do not round intermediate
ID: 2651551 • Letter: W
Question
What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations.)
What is the NPV at a discount rate of 12 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What is the NPV at a discount rate of 23 percent? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.Round your answer to 2 decimal places (e.g., 32.16).)
What is the NPV at a discount rate of 32 percent? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)
Consider the following cash flows:Explanation / Answer
Answer:
1
Calculation of NPV
Year
Cash Flow
PVF (0%)
PV
Calculation
PVF
Cash flow *PVF
0
$ (33,000.00)
1/(1+0.0)^0
1.00000
$ (33,000.00)
1
$ 13,400.00
1/(1+0.0)^1
1.00000
$ 13,400.00
2
$ 18,300.00
1/(1+0.0)^2
1.00000
$ 18,300.00
3
$ 10,800.00
1/(1+0.0)^3
1.00000
$ 10,800.00
Net Present value (Sum of PVs)
$ 9,500.00
2
Calculation of NPV
Year
Cash Flow
PVF (12%)
PV
Calculation
PVF
Cash flow *PVF
0
$ (33,000.00)
1/(1+0.12)^0
1.00000
$ (33,000.00)
1
$ 13,400.00
1/(1+0.12)^1
0.89286
$ 11,964.29
2
$ 18,300.00
1/(1+0.12)^2
0.79719
$ 14,588.65
3
$ 10,800.00
1/(1+0.12)^3
0.71178
$ 7,687.23
Net Present value (Sum of PVs)
$ 1,240.16
3
Calculation of NPV
Year
Cash Flow
PVF (23%)
PV
Calculation
PVF
Cash flow *PVF
0
$ (33,000.00)
1/(1+0.23)^0
1.00000
$ (33,000.00)
1
$ 13,400.00
1/(1+0.23)^1
0.81301
$ 10,894.31
2
$ 18,300.00
1/(1+0.23)^2
0.66098
$ 12,095.97
3
$ 10,800.00
1/(1+0.23)^3
0.53738
$ 5,803.75
Net Present value (Sum of PVs)
$ (4,205.97)
4
Calculation of NPV
Year
Cash Flow
PVF (32%)
PV
Calculation
PVF
Cash flow *PVF
0
$ (33,000.00)
1/(1+0.32)^0
1.00000
$ (33,000.00)
1
$ 13,400.00
1/(1+0.32)^1
0.75758
$ 10,151.52
2
$ 18,300.00
1/(1+0.32)^2
0.57392
$ 10,502.75
3
$ 10,800.00
1/(1+0.32)^3
0.43479
$ 4,695.72
Net Present value (Sum of PVs)
$ (7,650.01)
1
Calculation of NPV
Year
Cash Flow
PVF (0%)
PV
Calculation
PVF
Cash flow *PVF
0
$ (33,000.00)
1/(1+0.0)^0
1.00000
$ (33,000.00)
1
$ 13,400.00
1/(1+0.0)^1
1.00000
$ 13,400.00
2
$ 18,300.00
1/(1+0.0)^2
1.00000
$ 18,300.00
3
$ 10,800.00
1/(1+0.0)^3
1.00000
$ 10,800.00
Net Present value (Sum of PVs)
$ 9,500.00
2
Calculation of NPV
Year
Cash Flow
PVF (12%)
PV
Calculation
PVF
Cash flow *PVF
0
$ (33,000.00)
1/(1+0.12)^0
1.00000
$ (33,000.00)
1
$ 13,400.00
1/(1+0.12)^1
0.89286
$ 11,964.29
2
$ 18,300.00
1/(1+0.12)^2
0.79719
$ 14,588.65
3
$ 10,800.00
1/(1+0.12)^3
0.71178
$ 7,687.23
Net Present value (Sum of PVs)
$ 1,240.16
3
Calculation of NPV
Year
Cash Flow
PVF (23%)
PV
Calculation
PVF
Cash flow *PVF
0
$ (33,000.00)
1/(1+0.23)^0
1.00000
$ (33,000.00)
1
$ 13,400.00
1/(1+0.23)^1
0.81301
$ 10,894.31
2
$ 18,300.00
1/(1+0.23)^2
0.66098
$ 12,095.97
3
$ 10,800.00
1/(1+0.23)^3
0.53738
$ 5,803.75
Net Present value (Sum of PVs)
$ (4,205.97)
4
Calculation of NPV
Year
Cash Flow
PVF (32%)
PV
Calculation
PVF
Cash flow *PVF
0
$ (33,000.00)
1/(1+0.32)^0
1.00000
$ (33,000.00)
1
$ 13,400.00
1/(1+0.32)^1
0.75758
$ 10,151.52
2
$ 18,300.00
1/(1+0.32)^2
0.57392
$ 10,502.75
3
$ 10,800.00
1/(1+0.32)^3
0.43479
$ 4,695.72
Net Present value (Sum of PVs)
$ (7,650.01)
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