Net Present Value Calculation | CFA Level 1 Exam Question

Net Present Value Calculation

Prev Question Next Question

Question

What is the Net Present Value of this series of annual cash flows: Year 0: <$20,000>, Year 1: $15,000, Year 2: $5,000, Year 3: $7,500, using an interest rate of

10% per year? (Note that the <> are used to indicate a negative number).

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

E

On the BAII Plus, press CF 2nd CLRWork 20000 +/- ENTER DownArrow 15000 ENTER DownArrow DownArrow 5000 ENTER DownArrow DownArrow 7500

ENTER DownArrow DownArrow 2nd Quit. Then press NPV 10 ENTER DownArrow CPT. On the HP12C, press these keys: 20000 CHS BlueShift CFo 15000

BlueShift CFj 5000 BlueShift CFj 7500 BlueShift CFj Then press 10 i, YellowShift NPV. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard.