Question

At the beginning of June 2015, AnyBody Company suffered a cyberattack.  A series of payments had been interrupted for 3 months (June, July, and August).  The amount of the monthly cash payments was $1,000 per month.  The internal rate of return for the company is 12 percent annually.  Taking present values into account, how much was present value loss over the last 12 months compared with what would have been received if the attack had not occurred? (Make the present value comparisons as of January 1, 2015)

Answer 1

Present value of cash flow if the attack had not been there= $11298. Below is the calculation:

F F Date Cash Flow Date 1-Jan-15 -11298 31-Ja 31-Jan-15 1000 28-FE 28-Feb-15 1000 31-M 31-Mar-15 1000 30-A 30-Apr-15 1000 31-M 31-May-15 1000 30-J4 30-Jun-15 1000 31-) 31-Jul-15 1000 31-A 31-Aug-15 1000 30-SE 30-Sep-15 1000 31-0 31-Oct-15 1000 30-NC 30-Nov-15 1000 31-D 31-Dec-15 1000 =XIRR(F2:F14,E2:E14) XIRR(values, dates, (guess])

I E FF Date Cash Flow 1-Jan-15 -11298 31-Jan-15 1000 28-Feb-15 1000 31-Mar-15 1000 30-Apr-15 1000 31-May-15 1000 30-Jun-15 1000 31-Jul-15 1000 31-Aug-15 1000 30-Sep-15 1000 31-Oct-15 1000 30-Nov-15 1000 31-Dec-15 1000 IRR 12.00%

Monthly rate 12%/12=1%

Date	Month	Cash Flow if attack had not occurred	Present Value @1%(cash flow/1.01^month)
31-Jan-15	1	1,000.00	990.10
28-Feb-15	2	1,000.00	980.30
31-Mar-15	3	1,000.00	970.59
30-Apr-15	4	1,000.00	960.98
31-May-15	5	1,000.00	951.47
30-Jun-15	6	-	-
31-Jul-15	7	-	-
31-Aug-15	8	-	-
30-Sep-15	9	1,000.00	914.34
31-Oct-15	10	1,000.00	905.29
30-Nov-15	11	1,000.00	896.32
31-Dec-15	12	1,000.00	887.45
		Total (NPV)	8,456.83

Hence present value of loss =(11298-8456.83)=$2841.17