You are considering a project with an initial cash outlay of 60,000 lira and expected free cash flows of 20,000 lira at the end of each year for 5 years. The required rate of return for this project is 12%. Calculate the project’s NPV.

You owe your parents $10,000 (in present day dollars) and want to repay them in equal amounts the first to occur in 3 years from today and the other in 6 years from today. If the interest rate is 6.5% per annum compounding monthly, what will be the amount of each repayment?

Although the Chen Company’s milling machine is old, it is still in relatively good working order and would last for another 5 years. It is inefficient compared to modern standards, though, and so the company is considering replacing it. The new milling machine, at a cost of $50,000 delivered and installed, would also last for 5 years and would produce after-tax cash flows (labor savings and depreciation tax savings) of $14,000 per year. It would have zero salvage value at the end of its life. The firm’s WACC is 11%, and its marginal tax rate is 35%. What is the NPV of the new machine?

a. $6,747

b. $20,000

c. $1,743

d. $1,540

e. $80,000

Which of the following amounts is closest to the present value of payments of pounds 60,000 at the end of each of the next three years if the appropriate interest rate is 6%?

a. pounds 54,546

b. pounds 59,940

c. pounds 160,380

d. pounds 163,632

e. pounds 180,000