Use the present value tables included in Appendix A of your textbook to compute the NPV...
Use the present value tables included in Appendix A of your textbook to compute the NPV of $6,000 received in year 0, $5,250 received in year 1 and $3,800 received in year 2 at a 5% discount rate.
$13,756.95
$14,565.50
$15,647.25
$14,444.60
Homework Answers
| Year |
Amount Received (a) |
Present value factor @ 5% (b) |
Present value (a * b) |
| 0 | $6,000 | 1 | $6,000 |
| 1 | $5,250 | 0.952 | $4,998 |
| 2 | $3,800 | 0.907 | $3,446.6 |
| Total | $14,444.6 |
So, the answer is $14,444.6
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