The following questions are based on the Ch11 Lecture note. From Lecture note #11-7, suppose that the cash flows for year 3 are $90 for L and $30 for S but all other values are the same. Answer the questions below. Show your work

1. Calculate the NPV_L.

a. Use a formula.

b. Use Excel or a financial calculator show the setup.

2. Calculate the NPV_S

a. Use a formula.

b. Use Excel or a financial calculator show the setup.

3. Calculate the PV (Present Value) of L and S use the same values calculated for NPV. You can use either a formula, Excel, or calculator (Refer to Chapter 5).

Projects we'll examine: Cash Flow Year L S ACF 0 -100 -100 0 1 10 70 -60 2 60 50 10 3 80 20 60 ACF is the difference between CFL and CFs. We'll use ACF later