Npv, Macroeconomics

Assignment Help:

The cash flows (CFt) associated with an investment are listed below (assume that each cash flow occurs at the beginning of each year):

                        CF0  = -200

                        CF1  = 100

                        CF2  = 120

Should the firm undertake this project if:

a.  The interest rate is 5 percent (and what is the project's NPV).

b.  The interest rate is 10 percent (and what is the project's NPV).

c.  What interest rate would leave the firm indifferent to the investment decision?

 


Related Discussions:- Npv

Consumer increases her purchases of compact disks, Suppose a consumer's inc...

Suppose a consumer's income increases from $30,000 to $36,000. As a result, the consumer increases her purchases of compact disks (CDs) from 25 CDs to 30 CDs. What is the consumer'

What do you understand production method, Question 1 Discuss the relation...

Question 1 Discuss the relationship between microeconomics and macroeconomics Question 2 What do you understand production method? What precaution should be taken while

Fiscal Policy, What are the effects of the fiscal stimulus on the macroecon...

What are the effects of the fiscal stimulus on the macroeconomy

Inflation in sweden, Inflation in Sweden Figure Inflation in Swed...

Inflation in Sweden Figure Inflation in Sweden 1830 - 2010. Source: SCB. There are four aspects which are interesting when we look at inflation data for Sweden

Aggregate demand and aggregate supply, Find one or more articles in the wal...

Find one or more articles in the wall street Journal or other business publications that describe changes in fiscal or monetary policies in the United States. Discuss how these pol

Intertemporal choices , ) Consider an economy where individuals live for 2 ...

) Consider an economy where individuals live for 2 periods and have prefer- ences represented by ln(c) + ß ln(c') where c and c' represent consumption in the first and second perio

Estimate kilograms of lobster must he catch per day, A lobster catcher spen...

A lobster catcher spends $12 500 per month to maintain a lobster boat.  He plans to catch an average of 20 days per month during lobster season.  For each day, he must allow approx

Describe short-run equilibrium price-demand, The aim of this task is to exp...

The aim of this task is to explore the effects of a supply shock on a firm and thereby on the industry. Suppose that war breaks out in the Middle East, where a considerable portion

Exogenous variable change, Market questions come in two types: Type 1: y...

Market questions come in two types: Type 1: you are given the exogenous variable change and you must shift the correct curve in the right direction and then determine the new pr

Classical model, using a graph of the classical labour market,illustrate th...

using a graph of the classical labour market,illustrate the effects of a real wage existing in the market that is lower than the equilibrium real wage.what will eventually happen i

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd