What is the NPV of the following set of cash flows at a discount rate of zero percent? What if the discount rate is 15 percent? $$\begin{array} { | c | r | }
\hline \text { Year } & \text { Cash Flow } \
\hline 0 & - \$ 21,400 \
\hline 1 & 11,600 \
\hline 2 & 13,500 \
\hline 3 & 12,200 \
\hline
\end{array}$$
A)$0; -$665.07
B)$0; $6,916.59
C)$0; $7,208.19
D)$15,900; $7,208.19
E)$15,900; $6,916.59

Question

What is the NPV of the following set of cash flows at a discount rate of zero percent? What if the discount rate is 15 percent? $$\begin{array} { | c | r | } 
\hline \text { Year } & \text { Cash Flow } \
\hline 0 & - \$ 21,400 \
\hline 1 & 11,600 \
\hline 2 & 13,500 \
\hline 3 & 12,200 \
\hline
\end{array}$$
A)$0; -$665.07
B)$0; $6,916.59
C)$0; $7,208.19
D)$15,900; $7,208.19
E)$15,900; $6,916.59

Quizplus · Accepted Answer

At a 0% discount rate, NPV is the sum of cash flows: -21,400 + 11,600 + 13,500 + 12,200 = 15,900. At a 15% discount rate, NPV is calculated using the formula: NPV = Σ (Cash Flow / (1 + r)^t), resulting in $6,916.59.

What Is the NPV of the Following Set of Cash