Carol Thomas will pay out $6,000 at the end of year 2, $8,000 at the end of year 3, and receive $10,000 at the end of year 4. With an interest rate of 13%, what is the net value of the payments versus receipts in today's dollars?
A)$7,326
B)$10,242
C)$16,372
D)$4,112

Question

Quizplus · Accepted Answer

The net present value (NPV) is calculated by discounting each cash flow to its present value and summing them up. The NPV is $4,112.

Carol Thomas Will Pay Out $6,000 at the End of Year