In the previous example we concluded that at an interest rate of 15%, a positive NPV of £25,560 made Keith’s investment worthwhile. In other words, Keith would be getting a return on the project in excess of 15%. Using the following pro forma and the present value factors in the Appendix, calculate the net present value for the project using interest rates of 20%, 25% and 30%.

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Cash flow Discount Present Discount Present Discount factor value factor value factor Present value Year 20% 25% 30% (75,000) 1.000 (75,000) 1.000 (75,000) 1.000 (75,000) 012345 30,000 30,000 NPV NPV NPV 30,000 30,000 30,000