What is the net present value (NPV) of the following cash flows at a discount rate of 9%?
$\begin{array}{cccc}
\underline{ \text { t=0} } & \underline{ \text { t=1} } & \underline{ \text { t=2} } & \underline{ \text { t=3} } \
-250,000&100,000&150,000&200,000
\end{array}$

A) $122,431.81
B) $200,000
C) $155,950.68
D) None of the above

Question

What is the net present value (NPV) of the following cash flows at a discount rate of 9%?
$\begin{array}{cccc}
 \underline{ \text { t=0} } &  \underline{ \text { t=1} } & \underline{ \text { t=2} } & \underline{ \text { t=3} }  \
-250,000&100,000&150,000&200,000
\end{array}$

A) $122,431.81
B) $200,000
C) $155,950.68
D) None of the above

Quizplus · Accepted Answer

The NPV is calculated by discounting each cash flow to the present value and summing them up: NPV = -250,000 + 100,000/(1.09) + 150,000/(1.09^2) + 200,000/(1.09^3) = $122,431.81.

What Is the Net Present Value (NPV) of the Following