What is the Net Present Value of the following cash flow stream? Year Cash Flow 0...

Question

Question

What is the Net Present Value of the following cash flow stream?

Assume an interest rate of 20%

Answer 1

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Answer #1


CF
Discount rate	0.2
Year	0	1	2	3	4
Cash flow stream	-6119	1333	1395	1160	2709
Discounting factor	1	1.2	1.44	1.728	2.0736
Discounted cash flows project	-6119	1110.833	968.75	671.2963	1306.4236
NPV = Sum of discounted cash flows
NPV CF =	-2061.7
Where
Discounting factor =	(1 + discount rate)^(Corresponding period in years)
Discounted Cashflow=	Cash flow stream/discounting factor

Answer 2

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