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Example of Net Present Calculation
S.SIVARAM, STUDENT, India
Consider the following two investments:
Investment 1 requires a cash investment of $ 10,000 today and $14,000 two years from now. One year from now this investment will yield $24,000.
Investment 2 requires a cash investment of $ 6,000 today and $1,000 two years from now. One year from now this investment will yield $8,000.
Calculate the NPV and find the better investment. What is your answer?




You Forgot Discount RateRobert Fullsome, Accountant, United States You can't solve this problem unless there is a discount rate. I could calculate IRR, but not NPV. Try again. Here's an example in an
NPV calculator. 



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