What is the Net Present Value of this series of annual cash flows using an interest rate of 15% per year: Year 0: <$25,000>, Year 1: $5,000, Year 2: $0, Year 3:
$30,000? (Note that the <> are used to indicate a negative number).
Click on the arrows to vote for the correct answer
A. B. C. D. E.Explanation
On the BAII Plus, press CF 2nd CLRWork 25000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 0 ENTER DownArrow DownArrow 30000 ENTER
DownArrow DownArrow 2nd Quit. Then press NPV 15 ENTER DownArrow CPT. On the HP12C, press these keys: 25000 CHS BlueShift CFo 5000 BlueShift CFj
0 BlueShift CFj 30000 BlueShift CFj Then press 15 i, YellowShift NPV. The answer is negative, indicating that the PV of the cash flows to be received is less than the original cash outflow. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/
Y value set to 1.