Given the following cash flows and a discount rate of 9.5%, the net present value is...

Given the following cash flows and a discount rate of 9.5%, the net present value is closest to:

CF0 $ (27.50)

CF1 $ 8.75

CF2 $ 11.30

CF3 $ 14.90

St. Lawrence Ventures had cash flow from assets in 2014 of $1,875 (all values in thousands). The company paid interest expense of $370 and the cash flow to shareholders was $1,425. St. Lawrence:

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a

redeemed debt for $80.

b

issued debt for $80.

c

redeemed debt for $45

Expert Solution

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Statement showing Cash flows
Particulars	Time	PVf 9.5%	Amount	PV
Cash Outflows	-	1.00	(27.50)	(27.50)
PV of Cash outflows = PVCO				(27.50)
Cash inflows	1.00	0.91324	8.75	7.99
Cash inflows	2.00	0.83401	11.30	9.42
Cash inflows	3.00	0.76165	14.90	11.35
PV of Cash Inflows =PVCI				28.76
NPV= PVCI - PVCO				1.26

Q2 a redeemed debt for $80.

jeff jeffy answered 2 years ago

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