Here is the synopsis of our sample research paper on Net Present Value Calculations. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 8 page tutorial paper looks at three question set by the student which require net present values (NPV) to be calculated. The calculations are shown in full so the student can replicate them. The paper also includes an internal rate of return (IRR)calculation and two graphs showing values against discount rates.
Page Count:
8 pages (~225 words per page)
File: TS14_TEnvpcase.rtf
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Unformatted sample text from the term paper:
is that of Net Present Value (NPV). This takes the value of the profits of a project and discounts them into todays value. The scrap value is discounted at the
same rate as the last years, assuming that it is sold at the end of that year. If there is a 10% return required we would get the following assuming
an investment amount of 100,000, a scarp value of 10,000 at the end of year ten, and income of 16,000 for the first four years followed by 18,000 thereafter. This
would give us the following. NPV Year Profit (a) Discount rate (b) Discounted cash flow (a x b) Accumulative total Year 1 16,000 0.90909091 14,545 14,545 Year 2
16,000 0.82644628 13,223 27,769 Year 3 16,000 0.7513148 12,021 39,790 Year 3 16,000 0.68301346 10,928 50,718 Year 4 18,000 0.62092132 11,177 61,894 Year 5 18,000 0.56447393 10,161 72,055 Year 6
18,000 0.51315812 9,237 81,292 Year 7 18,000 0.46650738 8,397 89,689 Year 8 18,000 0.42409762 7,634 97,323 Year 9 18,000 0.38554329 6,940 104,262 Year 10 18,000 0.3504939 6,309 110,571 End value
10,000 0.3504939 3,505 114,076 Less initial investment 100,000 NPV 14,076 This means the NPV for the project is 14,076. If we want to look at the maximum that should
be paid out for the project then we need to look at where the NPV would be zero, which means taking the 100,000 and adding the positive value giving us
114,076 as the maximum price that should be paid. (ii). If the student uses a 20% required rate of return instead of the 10% this will result in a
negative rather than a positive value as shown below. NPV Year Profit Discount rate Discounted cash flow Accumulative total Year 1 16,000 0.833333 13,333 13,333 Year 2 16,000 0.694444
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