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Question #1 (3) A. Which cash flow below generates the largest NPV? (1) B. What is the value for the largest NPV? (2) C. Which

Question #1

(3) A. Which cash flow below generates the largest NPV?

(1) B. What is the value for the largest NPV?

(2) C. Which cash flow below generates the least NPV?

(2) D. What are the three primary differences between the cash flow cited in A vs. the cash flow cited in C? I.e. explain what forces were at play that caused

one to be the largest and the other to be the least?

(2) E. If you were the business owner, which cash flow of the two would you prefer?

MARR

Initial Investment

1

2

3

4

5

6

7

NPV

CF1

17%

-$400,000.00

$147,216.40

$218,129.49

$210,904.66

$292,567.57

$394,849.36

$394,849.36

$394,849.36

NPV1

CF2

20%

-$500,000.00

$176,659.68

$261,755.39

$253,085.59

$351,081.08

$473,819.23

$473,819.23

$473,819.23

NPV2

CF3

15%

-$1,000,000.00

$141,327.74

$209,404.31

$202,468.47

$280,864.87

$379,055.39

$379,055.39

$379,055.39

NPV3

CF4

10%

-$1,000.00

$70,663.87

$104,702.15

$101,234.23

$140,432.43

$189,527.69

$189,527.69

$189,527.69

NPV4

CF5

22%

-$10,000.00

$141,327.74

$209,404.31

$202,468.47

$280,864.87

$379,055.39

$379,055.39

$379,055.39

NPV5

CF6

15%

-$300,000.00

$176,659.68

$261,755.39

$253,085.59

$351,081.08

$473,819.23

$473,819.23

$473,819.23

NPV6

CF7

17%

-$250,000.00

$132,494.76

$196,316.54

$189,814.19

$263,310.81

$355,364.42

$355,364.42

$355,364.42

NPV7

CF8

21%

-$400,000.00

$117,920.34

$174,721.72

$168,934.63

$234,346.62

$316,274.34

$316,274.34

$316,274.34

NPV8

CF9

25%

-$1,000,000.00

$182,400.00

$279,055.22

$200,029.54

$374,955.46

$506,003.89

$560,030.89

$509,603.89

NPV9

CF10

5%

-$5,000.00

$3,018.76

$4,472.88

$4,324.73

$5,999.27

$8,096.62

$8,096.62

$8,096.62

NPV10

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