How do i calculate the NPV with discount rate of 5% of: Hero9, cost 20M over...
How do i calculate the NPV with discount rate of 5% of:
- Hero9, cost 20M over 2 years. Expect to generate 100M over 3 years in revenue, starting in the 2nd year
- DrainLESS Battery pack (w/ Univ. of HK), cost 12M over 3 years. Expect to generate 1M in year 3, 2M in year 4, and 10M in year 5.
- Subzero Space Research “Far View” 80M, expect to generate 0 in profit over 10 years
Homework Answers
NET PRESENT VALUE Formula : NPV= Future Cash Flow/ (1+i)^t-Initial Investment
where i=Discount rate
given that Investment is 20M over two years
and expect to generate 100M in revenue revenue
Discount Rate 5%
Hence NPV= 100M/(1+5%)^3-20M
=115.76M-20M
= 95.76M
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