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Basic Question 11 of 29
Michael undertakes an investment with an initial investment of $10,000, and he expects to receive $3,500 a year for the next four years. If the required return is 15%, what is the NPV?
B. $4.63
C. -$7.58
A. $5.49
B. $4.63
C. -$7.58
User Contributed Comments 7
| User | Comment |
|---|---|
| zhaojiang | FV=0, N=4, I/Y=15, PMT=3,500 CPT PV=9,992.42 NPV=-$10,000+$9,992.42=-$7.58 |
| thekapila | on BAII 2ND RESET CF0 10000 CF1 3500 F01 = 4 I = 15 CPT NPV = -7.58 |
| julescruis | Whenever cash flow are constant we should use the calculation method presented by zhaojiang as it is quicker |
| mattg | I love my HP12C! Anyone using the BAII, I advise you to throw it in the trash immediately and go get the HP I started on the BAII and it broke so I switched ... MUCH more intuitive, plus the buttons take effort to push so not so many mis-pressed keys! |
| johntan1979 | It's never about which calculator is better but WHOSE hands it is in. |
| jonan203 | jt1979 is right, but i love me some HP12C doggystyle polish action... |
| jlizzy | unsure what required rate of rtn is here? does this indicate how much it will cost to borrow money ($10k)? |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe the capital allocation process, calculate net present value (NPV), internal rate of return (IRR), and return on invested capital (ROIC), and contrast their use in capital allocation
CFA® 2024 Level I Curriculum, Volume 2, Module 5.