Example of Net Present Calculation


 
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Example of Net Present Calculation
S.SIVARAM, STUDENT, India, Member
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?...Sign up
 

 
You Forgot Discount Rate
Robert Fullsome, Accountant, United States, Member
You can't solve this problem unless there is a discount rate. I could calculate IRR, but not NPV. Try again....Sign up
 

 
Net Present Value Calculation Requires Discount Rate
Jaap de Jonge, Editor, Netherlands
@Robert Fullsome: Thanks for sharing your opinion. I agree Net Present Value calculation requires applying a discoun...Sign up
 

     
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