RatedrillNet present value
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
A project costs $25,000 today and returns $15,000, $13,000 and $12,000 at the end of years 1 to 3. At a cost of capital of 9.75%, what is its net present value? (Enter a negative number if NPV is below zero.)
What this problem teaches
Use the cash flow worksheet (CF), each frequency 1, then NPV with I as the rate in percent.
A hint if you get stuck
Discount each year's cash flow by (1 + r)^t, add them up, then subtract the initial cost.
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