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    Hà Vân
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    This document provides an example calculation of net present value (NPV) for an investment project. It shows the cash flows over 5 years, with an initial investment of $400 and annual cash flows of $100 each year. It calculates the NPV at discount rates of 10% and 15%, with the 10% rate yielding an NPV of -$20.92, indicating the project should not be invested in. It also shows the internal rate of return is calculated to be 11.22%.

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    This document provides an example calculation of net present value (NPV) for an investment project. It shows the cash flows over 5 years, with an initial investment of $400 and annual cash flows of $100 each year. It calculates the NPV at discount rates of 10% and 15%, with the 10% rate yielding an NPV of -$20.92, indicating the project should not be invested in. It also shows the internal rate of return is calculated to be 11.22%.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    Download as xlsx, pdf, or txt
    5 views4 pages

    Book 1

    Uploaded by

    Hà Vân
    This document provides an example calculation of net present value (NPV) for an investment project. It shows the cash flows over 5 years, with an initial investment of $400 and annual cash flows of $100 each year. It calculates the NPV at discount rates of 10% and 15%, with the 10% rate yielding an NPV of -$20.92, indicating the project should not be invested in. It also shows the internal rate of return is calculated to be 11.22%.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 4

    NPV Example:

    Year 0 1 2 3 4
    CF -$400.00 $100.00 $100.00 $100.00 $100.00

    PV -$400.00 $90.91 $82.64 $75.13 $68.30


    NPV -$20.92 > should not invest

    ($20.92)

    k1 10% NPV1 -$20.92


    k2 15% NPV2 -$64.78

    IRR 11.22%

    -$400.00 $100.00 $100.00 $100.00 $100.00


    Cummulative CF -$300.00 -$200.00 -$100.00 $0.00
    PP 2

    -$309.09 -$226.45 -$151.31 -$83.01


    DPP
    5 10%
    $100.00

    $62.09

    $100.00
    $100.00

    -$20.92
    2.66306
    Q10a:

    Year 0 1 2 3 4 5
    $1,900

    Co $1,900
    T 7
    r 12%
    e 2.718

    FV $ 4,400.71

    Q16:

    Number of Times Effective


    Stated Rate (APR)
    Compounded Rate (EAR)

    9.57% Semiannually 9.8% m= 2


    18.03% Monthly 19.6% 12
    7.98% Weekly 8.3% 52
    13.28% Infinite 14.2%

    Q18:
    6 7
    FV=?

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