Question
In: Finance
Consider the following two projects: Project Year 0 C/F Year 1 C/F Year 2 C/F Year...
Consider the following two projects: Project Year 0 C/F Year 1 C/F Year 2 C/F Year 3 C/F Year 4 C/F Year 5 C/F Year 6 C/F Year 7 C/F Discount Rate Alpha minus79 20 25 30 35 40 N/A N/A 16% Beta minus80 25 25 25 25 25 25 25 17% The net present value (NPV) for project beta is closest to:
Solutions
Expert Solution
| i | ii | iii | iv=ii*iii | |
| year | Beta cash flow | PVIF @ 17% | Present value | |
| 0 | -80 | 1.0000 | (80.00) | |
| 1 | 25 | 0.8547 | 21.37 | |
| 2 | 25 | 0.7305 | 18.26 | |
| 3 | 25 | 0.6244 | 15.61 | |
| 4 | 25 | 0.5337 | 13.34 | |
| 5 | 25 | 0.4561 | 11.40 | |
| 6 | 25 | 0.3898 | 9.75 | |
| 7 | 25 | 0.3332 | 8.33 | |
| 18.06 | ||||
| therefore NPV of Beta = | 18.06 | |||
jeff jeffy answered 8 months agoRelated Solutions
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