Present value of an investment future cash flows

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Reference no: EM131343697

1. The difference between the present value of an investment’s future cash flows and its initial cost is the:

payback period.

internal rate of return.

net present value.

discounted payback period.

profitability index.

2. What is the net present value of a project with an initial cost of $36,900 and cash inflows of $13,400, $21,600, and $10,000 for Years 1 to 3, respectively? The discount rate is 13 percent.

−$287.22

$797.22

−$1,350.49

$204.36

−$1,195.12

Reference no: EM131343697

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