What is the net present value of the following cash flow at a discount rate of 11%?
$$\frac { \mathrm { t } = 0 } { - 120,000 } \quad \frac { \mathrm { t } = 1 } { 300,000 } \quad - \frac { \mathrm { t } = 2 } { - 100,000 }$$
A) $69,108.03
B) $231,432.51
C) $80,000
D) None of the above

Question

Quizplus · Accepted Answer

The net present value (NPV) is calculated by discounting each cash flow back to the present value using the formula: NPV = $ \frac{-120,000}{(1+0.11)^0} + \frac{300,000}{(1+0.11)^1} + \frac{-100,000}{(1+0.11)^2} $. This results in an NPV of $69,108.03.

What Is the Net Present Value of the Following Cash t=0−120,000t=1300,000−t=2−100,000\frac { \mathrm { t } = 0 } { - 120,000 } \quad \frac { \mathrm { t } = 1 } { 300,000 } \quad - \frac { \mathrm { t } = 2 } { - 100,000 }−120,000t=0​300,000t=1​−−100,000t=2​

What Is the Net Present Value of the Following Cash $\frac { \mathrm { t } = 0 } { - 120,000 } \quad \frac { \mathrm { t } = 1 } { 300,000 } \quad - \frac { \mathrm { t } = 2 } { - 100,000 }$