-Calculate the total net present value for Project Two using a discount rate of 12%.
A)$11,252.33
B)$105,252.33
C)$94,000.00
D)$59,821.43
E)Do not have enough information to compute

Question

-Calculate the total net present value for Project Two using a discount rate of 12%.
A)$11,252.33 
B)$105,252.33 
C)$94,000.00 
D)$59,821.43 
E)Do not have enough information to compute

Quizplus · Accepted Answer

The correct answer is A because the net present value of Project Two using a discount rate of 12% is $11,252.33. This can be calculated using the following formula:NPV = -Initial Investment + Sum of Present Values of Future Cash FlowsNPV = -$100,000 + $12,500/(1.12^1) + $15,000/(1.12^2) + $20,000/(1.12^3) + $25,000/(1.12^4) + $30,000/(1.12^5)NPV = -$100,000 + $11,111.11 + $13,398.13 + $17,766.99 + $22,300.89 + $26,965.04NPV = $11,252.33

-Calculate the Total Net Present Value for Project Two Using