

Subject:
Finance
Category: Business and Money > Finance Asked by: baseball2ga List Price: $5.00 
Posted:
25 Jul 2005 16:20 PDT
Expires: 24 Aug 2005 16:20 PDT Question ID: 547812 
What am I doing wrong? I am trying to figure NPV with an opportunity cost of capital at 12%. Project flows for year one is 28,500, year two is 22,500, year three is 16,500 and year four is a 500.00. I am using the following formula: 28,500/1.12 + 22,500/ (1.12)^2 + 16,500/ (1.12)^3 + 500/ (1.12)^ 4 My calculator is telling me syntax error. Can I not plug in a negative number? Sorry, I am really ignorant with this stuff. Any help would be greatly appreciated. Thanks. 

Subject:
Re: Finance
Answered By: omnivorousga on 25 Jul 2005 16:28 PDT Rated: 
Baseball2  My HP (it's an old model) will take the negative numbers  and indeed you should show outward cashflow for year 4 with these assumptions. Here are the NPV factors: Year 1: 1.1200 Year 2: 1.2544 Year 3: 1.4049 Year 4: 1.5735 So the year 4 cash flow, discounted is 500/1.5735 = 317.76 Let me know if there are any other problems in calculating this NPV. Best regards, OmnivorousGA  
 

baseball2ga
rated this answer:
I get it now. Sorry for the confusion and thank you very much! 

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