Question

please I need the number as round it to 2 decimal places

Problem 8-9 Calculating NPV [LO 4] Consider the following cash flows: Year 0 Cash Flow 33,500 15,000 16,700 12,400 WN- a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 9 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 19 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the NPV at a discount rate of 29 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Net present value b. Net present value Net present value d. Net present value

Answer 1

a. NPV = $10,600.00

b. NPV = $3,892.60

c. NPV = $(1,743.65)

d. NPV = $(6,060.30)

Year 1 Cashflow Discount Factor @ 0% (y) (33,500.00) 15,000.00 16,700.00 12,400.00 Total / NPV Discounted Cashflow (x.y) (33,500.00) 15,000.00 16,700.00 12,400.00 10,600.00 Year Cashflow Discount Factor @ 9% (x) (y) (33,500.00) 15,000.00 0.9174 16,700.00 0.8417 12,400.00 0.7722 Total / NPV Discounted Cashflow (x.y) (33,500.00) 13,761.47 14,056.06 9,575.08 3,892.60

Year Cashflow Discount Factor @ 19% Discounted Cashflow (x) (y) (x.y) 0 (33,500.00) (33,500.00) 15,000.00 0.8403 12,605.04 16,700.00 0.7062 11,792.95 3 12,400.00 0.5934 7,358.36 Total / NPV (1,743.65) d) Year (y) 0 Cashflow Discount Factor @ 29% Discounted Cashflow (x) (x.y) (33,500.00) (33,500.00) 15,000.00 0.7752 11,627.91 16,700.00 0.6009 10,035.45 12,400.00 0.4658 5,776.34 Total / NPV (6,060.30) 2 3

Discount Factor Formula:

$\fn_jvn Discount~Factor = \frac{1}{(1+i)^n}$

where, i = rate of discount

n = number of periods

for example,

discount factor at 9% for year 1:

= 1/(1+1.09)¹

=0.9174

discount factor at 9% for year 2:

= 1/(1+09)²

^{= 0.8417}

^{and so on....}