For a discount rate of 15%, consider a project with the cash flows shown in Figure 8.

a Compute project NPV if cash flows are at the end of the year.

b Compute project NPV if cash flows are at the beginning of the year.

c Compute project NPV if cash flows are at the middle of the year.

Transcribed Image Text:

D E F G H A B C 1 dr 0.15 2 3 Time 4 1 2 -400 200 5 6 7 end of year end of yr. $375.06 8 beginning of yr. beg. of yr. $431.32 $431.32 9 middle of year middle of yr. $402.21 3 600 4 5 6 -900 1000 250 7 230