A project has the following cash flows What Is the NPV at a discount rate of zer

Question

A project has the following cash flows What Is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round you. answer to the nearest whole number, e.g., 32.) What is the NPV at a discount rate of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What is the NPV at a discount rate of 23 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 at a discount rate of 29 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.)

Explanation / Answer

Calculation of the NPV NPV = Present Value of Cash Inflows- Cash Outflows NPV at 0 Percent NPV = 8100+9400+7900-17400 25400-17400 8000 NPV = $8,000 NPV at 11 Percent NPV = 8100/(1.11)^1+9400(1.11)^2+7900/(1.11)^3-17400 8100*.901+9400*.812+7900*.731-17400 7297.29+7629.25+5776.41-17400 20702.96-17400 NPV = $3,302.96 NPV at 23 Percent NPV = 8100/(1.23)^1+9400(1.23)^2+7900/(1.23)^3-17400 8100*.813+9400*661+7900*.537 6585.36+6213.23+4245.33-17400 17043.93-17400 NPV = ($356) NPV at 29 Percent NPV = 8100/(1.29)^1+9400(1.29)^2+7900/(1.29)^3-17400 8100*.775+9400*.601+7900*.466 6279.07+5648.70+3680.08 15607.85-17400 NPV = ($1,792.15)

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