Use the present value table in Appendix A and Appendix B to

Use the present value table in Appendix A and Appendix B to compute the NPV of each of the following cash inflows: a. $18,300 received at the end of 15 years. The discount rate is 5 percent. b. $5,800 received at the end of four years and $11,600 received at the end of eight years. The discount rate is 7 percent. c. $1,300 received annually at the end of each of the next seven years. The discount rate is 6 percent. d. $40,000 received annually at the end of each of each of the next three years and $65,000 received at the end of the fourth year. The discount rate is 3 percent.

Solution

a Present value = 18300*0.481= 8802 b Present value =(5800*0.763)+(11600*0.582)= 11177 c Present value =1300*5.582= 7257 d Present value =(40000*2.829)+(65000*0.888)= 170880