2 Year (n) Cash Inflow () Cash Outflow () Net Cash Flow (NCF) Discount factor (DF) Present Value = NCF DF 3 0 0 11500 4 1 8000 2500 5 2 8000 1300 6 3 9000 1800 2 4 6500 3100 5 5500 3600 9 6 7000 3500 10 7 7500 3000 11 8 7000 2500 12 9 7750 2000 13 10 8000 3000 14 11 8500 3500 12 9000 3000 16 Total 18 NPV- 20 Open the Net Present Value Worksheet in the Test 3 Data file in Excel Suppose we have the cash flow given in the NPV worksheet with an associated project Find the Net Cash Flow for Year 5 to the nearest whole number 1 Answer Suppose Project B has a Net Present Value of 8,945 and Project C has a Net Present Value of 10,943 Which project is more profitablo? Project is more profitable because the NPV for Project B is smaller O Project is more profitable because the NPV for Project is larger O Project B is more profitable because the NPV for Project B is larger O Project is more profitable because the NPV for Project is smaller Neither is more profitable