calculate the net present value for the following cash flows if the required return is 14%....

Question

Question

calculate the net present value for the following cash flows if the required return is 14%.

Year 0 is -26,000

year 1 is 11,000

year 2 is 14,000

year 3 is 10,000

business finance

Answer 1

Answer #1

Net Present value is calculated as follows:

Year	Discount factor	Cash flow	Present value of cash flow
a	b=1.14^-a	c	d=b*c
0	1.0000	-26,000	-26,000.00
1	0.8772	11,000	9,649.12
2	0.7695	14,000	10,772.55
3	0.6750	10,000	6,749.72

Net Present value			1,171.38

Answer 2

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