![3. 1.77 points Problem 8-9 Calculating NPV CLO 4] Consider the following cash flows: Year Cash Flow -$34.000 14.100 17.600 11,500 What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32) Net present value What is the NPV at a discount rate of 8 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Net present value What is the NPV at a discount rate of 18 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g. 32.16.) Net present value What is the NPV at a discount rate of 28 percent? (A negative answer should be indicated by aminus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g. 32.16. Net present value](http://img.homeworklib.com/questions/598fe5e0-bf82-11ea-8c6a-6fc2369bd947.png?x-oss-process=image/resize,w_560)
Homework Answers
1.Present value of inflows=14100+17600+11500
=$43200
Hence NPV=.Present value of inflows-.Present value of outflows
=43200--34000
=$9200.
2.Present value=cash flow*Present value of discounting factor(rate of interest%,time period)
=14100/1.08+17600/1.08^2+11500/1.08^3
=37273.79
Hence NPV=37273.79-34000
=$3273.79
3.Present value=cash flow*Present value of discounting factor(rate of interest%,time period)
=14100/1.18+17600/1.18^2+11500/1.18^3
=31588.45
Hence NPV=31588.45-34000
=$(2411.55)
4.Present value=cash flow*Present value of discounting factor(rate of interest%,time period)
=14100/1.28+17600/1.28^2+11500/1.28^3
=27241.44
Hence NPV=27241.44-34000
=$(6758.56)(approx).
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