Homework Answers
1. USE DISCOUNT RATE @ 6 % - PVIF TABLE
| Year | Cash Flow | Discount rate @6% | Present Value |
| (A) | (B) | (A X B) | |
| 0 | -50 | 1 | -50.00 |
| 1 | 5 | 0.9434 | 4.72 |
| 2 | 7 | 0.89 | 6.23 |
| 3 | 6 | 0.8396 | 5.04 |
| 4 | 4 | 0.7921 | 3.17 |
| 5 | 18 | 0.7473 | 13.45 |
| 6 | 28 | 0.705 | 19.74 |
| TOTAL | NPV | 2.34 (ANSWER) |
2. SOLVED IN EXCEL
| Year | Cash Flow |
| (A) | |
| 0 | -152790 |
| 1 | -1293 |
| 2 | 2135 |
| 3 | 26574 |
| 4 | 56549 |
| 5 | 75855 |
| 6 | 90800 |
| 7 | 102031 |
| IRR | =IRR(F18:F25) |
| IRR | 17% (ANSWER) |
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