Show with clear workings how the present value of 100 received ten years from now differs...

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Show with clear workings how the present value of £100 received ten years from now differs depending on whether the discount rate is 5% or 35%. (ii) Explain and discuss the Net Present Value (NPV) appraisal method and the NPV rule for choosing a project. (iii) Show with clear workings that the NPV of the following project is negative using a discount rate of 22%. The project initial cost = £100 in year 0 and there are net positive cash flows of £50 in year 1 and £150 in year 5. (iv) Explain and discuss how you should proceed If a project has a choice of size and if you find that the largest size has a positive NPV. Show with clear workings how the present value of £100 received ten years from now differs depending on whether the discount rate is 5% or 35%. (ii) Explain and discuss the Net Present Value (NPV) appraisal method and the NPV rule for choosing a project. (iii) Show with clear workings that the NPV of the following project is negative using a discount rate of 22%. The project initial cost = £100 in year 0 and there are net positive cash flows of £50 in year 1 and £150 in year 5. (iv) Explain and discuss how you should proceed If a project has a choice of size and if you find that the largest size has a positive NPV.

Answer rating: 100% (QA)

i The present value of 100 received ten years from now can be calculated using the formula for present value PV FV 1 rn where PV is the present value ... View the full answer