Which three of the following would you need to know when calculating the net present value of a five year project?
A) The initial cash flow
B) The cash flow in year 1
C) The opportunity cost of capital
D) The real rate of return

Question

Quizplus · Accepted Answer

To calculate the net present value (NPV) of a project, you need the initial cash flow (A), the cash flows for each year of the project including year 1 (B), and the opportunity cost of capital (C) to discount those cash flows to their present value. The real rate of return (D) is not directly needed for NPV calculation.

Which Three of the Following Would You Need to Know