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How do you calculate Net Present Value in finance?
Discount Rate= 15%
Cash Flows for next 4 years: $185, $203, $224, & $228
Investment= $300
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- CocoLv 78 years agoFavorite Answer
(185/1.15) + (203 / 1.15^2) + (224 / 1.15^3) + (228 / 1.15^4) = 516.40
Net Present Value = 516.40 - 300 = 216.40
- Don GLv 78 years ago
Compare the 300 investment with the PV of the future cash flows, discounted at 15%.
The NPV is 292 positive. (PV of future cash flow 592 - 300)
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