Question

Wilkinson Co. has identified an investment project with the following cash flows:

    

Year				Cash Flow
	1			$	760
	2				1,010
	3				1,270
	4				1,375

  

If the discount rate is 11 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

If the discount rate is 18 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

If the discount rate is 24 percent, what is the present value of these cash flows?

Answer 1

1.Net present value is solved using a financial calculator. The steps to solve on the financial calculator:

• Press the CF button.
• CF0= $0.
• Cash flow for all the years should be entered.
• Press Enter and down arrow after inputting each cash flow.
• After entering the last cash flow, press the NPV button and enter the discount rate of 11%
• Press the down arrow and CPT buttons to get the net present value.

Net Present value of cash flows at 11% discount rate is $3,338.79.

2.Net present value is solved using a financial calculator. The steps to solve on the financial calculator:

• Press the CF button.
• CF0= $0.
• Cash flow for all the years should be entered.
• Press Enter and down arrow after inputting each cash flow.
• After entering the last cash flow, press the NPV button and enter the discount rate of 18%
• Press the down arrow and CPT buttons to get the net present value.

Net Present value of cash flows at 18% discount rate is $2,851.61.

3.Net present value is solved using a financial calculator. The steps to solve on the financial calculator:

• Press the CF button.
• CF0= $0.
• Cash flow for all the years should be entered.
• Press Enter and down arrow after inputting each cash flow.
• After entering the last cash flow, press the NPV button and enter the discount rate of 24%
• Press the down arrow and CPT buttons to get the net present value.

Net Present value of cash flows at 24% discount rate is $2,517.46.

In case of any query, kindly comment on the solution.