An investment has an installed cost of $535,800. The cash flows over the four-ye

Question

An investment has an installed cost of $535,800. The cash flows over the four-year life of the investment are projected to be $213,850, $230,450, $197,110, and $145,820.

If the discount rate is zero, what is the NPV? (Do not round intermediate calculations.)

If the discount rate is infinite, what is the NPV? (Negative amount should be indicated by a minus sign.)

At what discount rate is the NPV just equal to zero? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Discount Rate for which NPV is 0 18.621% Year 0 1 2 3 4 -535800 213850 230450 197110 145820 Discount cash flow at infinite rate -535800 0.021385 2.3E-09 1.97E-16 1.46E-23 -535800 180280.1 163777.2 118092.9 73649.66 NPV @18.621% -0.108674139 NPV@INFINITE DISCOUNT -535799.9786 NPV@0% DISCOUNT 251430

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