A new computer system will require an initial outlay of $15,650, but it will increase the firm s cash flows by $3,400 a year for each of the next 7 years. Calculate the NPV and decide if the system is worth installing if the required rate of return is 10%.

a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 15%.

b. How high can the discount rate be before you would reject the project?

Suppose your retirement goal is to accumulate $400 in 2.5 years. How much do you need to deposit in the bank today to meet your goal if the bank offers an interest rate of 5.65%?

a. $321

b. $336

c. $482

d. $293

e. $349

A machine costs $80,000 to purchase and generates an annual revenue of $26,000 with an $8,500 annual cost. Assume that your time value of money (MARR) is 7%, and this machine lasts 6 years.

What is the Net Present Value?

You are to receive $50,000, 10.25 years from now. If the quoted annual rate (APR) is 9.25%, what is the present value of that amount assuming continuous compounding?

a. $19,373.34

b. $16,134.72

c. $20,922.95

d. $25,988.50

e. $15,908.75

The projected net cash flows for an investment are (in Pound ‘000):

Y0: -950

Y1: 130

Y2: 200

Y3: 330

Y4: 270

Y5: 180

What is the net present value of the investment, assuming a 6% cost of capital and a 900 initial investment?