1. Compute the net present value (NPV) of the following cash flows:End of YearCash Flow, $1000a. NPV = -2,633.99The interest rate is 15% per year, compounded annually.b. NPV== 2,633.990C. NPV = 1,617.99-614223-3-253

Given cashflows for 5 years interest rate = 15 % Net present value = cashflow each year / (1 +…

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The interest rate is 15% per year, compounded annually.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Compute the net present value (NPV) of the following cash flows:
End of Year
Cash Flow, $1000
a. NPV = -2,633.99
The interest rate is 15% per year, compounded annually.
b. NPV
=
= 2,633.99
0
C. NPV = 1,617.99
-6
1
4
2
2
3
-3
-2
5
3

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