Q1

A very peculiar project with a 35-year life requires an immediate investment of -$947,000 and will generate +$1,000 in year 1; +$2,000 in year 2; +$3,000 in year 3; ... and so on until the end of its life. What is the NPV of this project for a discount rate of 0%? Round the answer to the nearest dollar. (Acceptable error = $1,000)

Q2

A very peculiar project with a 46-year life requires an immediate investment of -$920,000 and will generate a cash flow of +$22,000 in year 1. Each year thereafter the cash flow will increase by +$1,000 until the end of the project's life. What is the NPV of this project for a discount rate of 0%? Round the answer to the nearest dollar. (Acceptable error = $1,000)

Q3

A very peculiar project with a 49-year life requires an immediate investment of -$911,000 and will generate +$1,053 in year 1. Each year thereafter the cash flow will increase by +$1,000 until the end of the project's life. What is the NPV of this project for a discount rate of 0%? Round the answer to the nearest dollar. (Acceptable error = $1,000)

Q4

A very peculiar project with a 72-year life requires an immediate investment of -$949,000 and will generate a cash flow of $1,000 in year 1; $2,000 in year 2; and so on, with the cash flow increasing by $1,000 per year until year 43. Then, due to a sudden and profound economic depression, the project will generate no cash flows for the next 12 years. Fortunately, once the depression is over the previous cash flow pattern will continue. Thus, as an example, if the final year of the zero-cash depression is year 49 then the cash flow in year 50 would be $50,000; in year 51 it would be $51,000, and so on, with the cash flow once again increasing by +$1,000 per year until the end of the project's life. What is the NPV of this project for a discount rate of 0%? Round the answer to the nearest dollar. (Acceptable error = $1,000)

Answer rating: 100% (QA)

Step 14 at discount rate is 0 cash flow will be the present value of cash flow and each year cash fl... View the full answer