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NPV Problems and Solutions Guide

The document contains numerical data and calculations related to cash flows, discount rates, and net present value (NPV). It includes tables showing cash inflows and outflows over multiple years, discount factors calculated using rates like 20% and 0.2, and NPV totals for different cash flow scenarios ranging from -$105,500 to $56,650. Formulas are provided and calculated for concepts like discount factors, NPV, and the number of months between compounding periods.

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Sita Ram
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135 views5 pages

NPV Problems and Solutions Guide

The document contains numerical data and calculations related to cash flows, discount rates, and net present value (NPV). It includes tables showing cash inflows and outflows over multiple years, discount factors calculated using rates like 20% and 0.2, and NPV totals for different cash flow scenarios ranging from -$105,500 to $56,650. Formulas are provided and calculated for concepts like discount factors, NPV, and the number of months between compounding periods.

Uploaded by

Sita Ram
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

1 2

-50000 15000 25000

k 20%
0.2

12500 17361.11111111

62895.447530864
12895

Year Inflows
0 
1 50,000
2 250,000
3 350,000
   

Year Inflows
1/(1+k)^t 0 
Discount Factor 1 75,000
Ft x 1/(1+k)^t 2 75,000
3 75,000
4 50,000
   

Year Inflows
0 
1 15,000
2 25,000
3 50,000
4 50,000
5 150,000
   

400000

900000
1
400000
3 4 5
30000 20000 15000

17361.11111111 9645.0617284 6028.16358024691

Outflows Net flow Discount Factor NPV


500,000 -500,000 1 -500,000
  50,000 0.81 40,500 0.81300813
  250,000 0.66 165,000 0.66098222
  350,000 0.54 189,000 0.537383918
      Total:
($105,500)
-105,500

Outflows Net flow Discount Factor NPV


250,000 -250,000 1 -250,000
  75,000 0.81 60,750
  75,000 0.66 49,500
  75,000 0.54 40,500
  50,000 0.44 22,000
      Total:
($77,250)

Outflows Net flow Discount Factor NPV


75,000 -75,000 1 -75,000
  15,000 0.81 12,150
  25,000 0.66 16,500
  50,000 0.54 27,000
  50,000 0.44 22,000
  150,000 0.36 54,000
      Total:
$56,650

12
1.33333333E-05
5.333333333333 months

0.444444444444

4+.44 4.44
40500

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