Calculate the net present value of cash flows, Financial Management

Assume a firm has the following cash flows for the next five years: $50,000, $100,000, $150,000, $200,000, and $300,000. We start this business with an initial investment of $250,000.

a. Assuming the cost of capital is zero (free financing); what is the Net Present Value of cash flows from this project?

b. Assuming the discount rate is 3% above the rate of inflation, and the average rate of inflation is 7%, what is the Net Present Value of this project?

c. Interpret your findings in a and b.

Posted Date: 3/2/2013 2:37:42 AM | Location : United States







Related Discussions:- Calculate the net present value of cash flows, Assignment Help, Ask Question on Calculate the net present value of cash flows, Get Answer, Expert's Help, Calculate the net present value of cash flows Discussions

Write discussion on Calculate the net present value of cash flows
Your posts are moderated
Related Questions
Q. Accounting Change? Accounting Change - Change in (1) an accounting principle (2) an accounting estimate or (3)the reporting entity which necessitates DISCLOSURE and explan

Q. Describes the Gordons dividend model? Gordon's Model: - Gordon's model is one more theory which contends that dividend policy is relevant for the value of the firm. Alternat

Q. Explain about Death Benefit? Death Benefit - Amounts received under a life insurance contract and paid by reason of death of the insured. (Even though most death benefits ar

Define operating cycle and long and short operating cycle? Use of operating cycle? Can someone give me assistance on these questions??

one page paper reviewing "the Morgan Stanley Oil and Gas Report"

Question 1 Analyse the financial requirements of a FMCG company 2 If you are an investor and are interested in finding out the value of an amount of Rs 10,000 to be received

The following information pertains to Fairways Driving Range, Inc.: The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they wi

Examine about Environmental (external) analysis "A study that considers potential environmental effects during planning phase before an investment is made or an operation start

Investment intermediaries An investment intermediary includes finance companies, mutual funds, investment banks and securities firms.

how do you find total cash outflow through maturity