Question

1. Your company wants to invest $250,000 in a new machine. Cash flows that result are: Yr1: 50,000; Yr2: 121,000; Yr3: 86,000; Yr4: 100,000. Cost of capital is 14%. What is the NPV?

Group of answer choices

-$12,456.00

$35,012.00

$4,220.00

$0.00

2.Calculate the NPV:

Investment amount: ($8,250,000). Cash flows: Yr1: 2,500,000; Yr2: 3,500,000; Yr3: 4,500,000; Yr4: 5,500,000. Cost of capital: 24%

Group of answer choices

$728,951.00

-$456,331.00

$0.00

$32.019.00

3.For the following, calculate the NPV:

Investment amount: ($1,000,000). Cash flows: Yr1: 251,000; Yr2: 289,000; Yr3: 582,000; Yr4: 456,000. Cost of capital: 16%.

Group of answer choices

$55,860.00

$26,543.00

-$61,456.00

$0.00

4.For the following cash flows, calculate the NPV:

Investment ($10,000); Yr1: 4,000; Yr2: 3,000; Yr3: 4,000; Yr4: 2,500. Cost of capital is 10%.

Group of answer choices

-$124.00

$0.00

$345.67

$828.50

5.For the following, calculate the NPV:

Investment amount: ($2,500,000). Cash flows: Yr1: 175,000; Yr2: 588,000; Yr3: 1,400,000; Yr4: 1,350,000. Cost of capital: 17%

Group of answer choices

$241,333.00

$0.00

$35,980.00

-$326,339.00

6.For the following, calculate the NPV:

Investment amount: ($100,000). Cash flows: Yr1: 25,000; Yr2: 38,000; Yr3: 44,000; Yr4: 28,000. Cost of capital: 15%

Group of answer choices

-$4,587.00

-$2,455.00

$0.00

$6,780.00

Answer 1

1.	NPV		$           4,220.00
Working:
Year	Cash flow	Discount factor	Present Value
a	b	c=1.14^-a	d=b*c
0	$       -2,50,000	1.0000	$    -2,50,000.00
1	$             50,000	0.8772	$         43,859.65
2	$         1,21,000	0.7695	$         93,105.57
3	$             86,000	0.6750	$         58,047.55
4	$         1,00,000	0.5921	$         59,208.03
	NPV		$           4,220.80
2.	NPV		$     7,28,951.00
Working:
Year	Cash flow	Discount factor	Present Value
a	b	c=1.24^-a	d=b*c
0	$     -82,50,000	1.0000	$ -82,50,000.00
1	$       25,00,000	0.8065	$   20,16,129.03
2	$       35,00,000	0.6504	$   22,76,274.71
3	$       45,00,000	0.5245	$   23,60,192.68
4	$       55,00,000	0.4230	$   23,26,354.79
	NPV		$     7,28,951.21
3.	NPV		$         55,860.00
Working:
Year	Cash flow	Discount factor	Present Value
a	b	c=1.16^-a	d=b*c
0	$     -10,00,000	1.0000	$ -10,00,000.00
1	$         2,51,000	0.8621	$     2,16,379.31
2	$         2,89,000	0.7432	$     2,14,774.08
3	$         5,82,000	0.6407	$     3,72,862.77
4	$         4,56,000	0.5523	$     2,51,844.74
	NPV		$         55,860.90
4.	NPV		$               828.50
Working:
Year	Cash flow	Discount factor	Present Value
a	b	c=1.10^-a	d=b*c
0	$           -10,000	1.0000	$       -10,000.00
1	$               4,000	0.9091	$           3,636.36
2	$               3,000	0.8264	$           2,479.34
3	$               4,000	0.7513	$           3,005.26
4	$               2,500	0.6830	$           1,707.53
	NPV		$               828.50
5.	NPV		$    -3,26,339.00
Working:
Year	Cash flow	Discount factor	Present Value
a	b	c=1.17^-a	d=b*c
0	$     -25,00,000	1.0000	$ -25,00,000.00
1	$         1,75,000	0.8547	$     1,49,572.65
2	$         5,88,000	0.7305	$     4,29,541.97
3	$       14,00,000	0.6244	$     8,74,118.78
4	$       13,50,000	0.5337	$     7,20,427.57
	NPV		$    -3,26,339.04
6.	NPV		$          -4,587.00
Working:
Year	Cash flow	Discount factor	Present Value
a	b	c=1.15^-a	d=b*c
0	$       -1,00,000	1.0000	$    -1,00,000.00
1	$             25,000	0.8696	$         21,739.13
2	$             38,000	0.7561	$         28,733.46
3	$             44,000	0.6575	$         28,930.71
4	$             28,000	0.5718	$         16,009.09
	NPV		$          -4,587.61