Present Value of a Lump-Sum Rate of interest per period in percent Periods 3% 5%
ID: 2472762 • Letter: P
Question
Present Value of a Lump-Sum
Rate of interest per period in percent
Periods
3%
5%
8%
9%
10%
12%
14%
15%
16%
20%
1
0.9709
0.9524
0.9259
0.9174
0.9091
0.8929
0.8772
0.8696
0.8621
0.8333
2
0.9426
0.9070
0.8573
0.8417
0.8265
0.7972
0.7695
0.7561
0.7432
0.6944
3
0.9151
0.8638
0.7938
0.7722
0.7513
0.7118
0.6750
0.6575
0.6407
0.5787
4
0.8885
0.8227
0.7350
0.7084
0.6830
0.6355
0.5921
0.5718
0.5523
0.4823
5
0.8626
0.7835
0.6806
0.6499
0.6209
0.5674
0.5194
0.4972
0.4761
0.4019
6
0.8375
0.7462
0.6311
0.5963
0.5645
0.5066
0.4556
0.4323
0.4104
0.3349
7
0.8131
0.7107
0.5835
0.5470
0.5132
0.4523
0.3996
0.3759
0.3538
0.2791
8
0.7894
0.6768
0.5403
0.5019
0.4665
0.4039
0.3506
0.3269
0.3050
0.2326
9
0.7664
0.6446
0.5003
0.4604
0.4241
0.3606
0.3075
0.2843
0.2630
0.1938
10
0.7441
0.6139
0.4632
0.4224
0.3855
0.3220
0.2697
0.2472
0.2267
0.1615
12
0.7014
0.5568
0.3971
0.3555
0.3186
0.2567
0.2076
0.1869
0.1685
0.1122
15
0.6419
0.4810
0.3152
0.2745
0.2394
0.1827
0.1401
0.1229
0.1079
0.0649
16
0.6232
0.4581
0.2919
0.2519
0.2176
0.1631
0.1229
0.1069
0.0930
0.0541
17
0.6050
0.4363
0.2703
0.2311
0.1978
0.1456
0.1078
0.0929
0.0802
0.0471
18
0.5874
0.4155
0.2503
0.2120
0.1799
0.1300
0.0946
0.0808
0.0691
0.0376
19
0.5703
0.3957
0.2317
0.1945
0.1635
0.1161
0.0829
0.0703
0.0596
0.0313
20
0.5537
0.3769
0.2146
0.1784
0.1486
0.1037
0.0728
0.0611
0.0514
0.0261
21
0.5375
0.3589
0.1987
0.1637
0.1351
0.0926
0.0638
0.0531
0.0443
0.0217
24
0.4920
0.3101
0.1577
0.1264
0.1015
0.0659
0.0431
0.0349
0.0284
0.0126
25
0.4776
0.2953
0.1460
0.1160
0.0923
0.0588
0.0378
0.0304
0.0245
0.0105
Present Value of an Annuity
Rate of interest per period in percent
Periods
3%
5%
8%
9%
10%
12%
14%
15%
16%
20%
1
0.9709
0.9524
0.9259
0.9174
0.9091
0.8929
0.8772
0.8696
0.8621
0.8333
2
1.9135
1.8594
1.7833
1.7591
1.7355
1.6901
1.6467
1.6257
1.6052
1.5278
3
2.8286
2.7233
2.5771
2.5313
2.4869
2.4018
2.3216
2.2832
2.2459
2.1065
4
3.7171
3.5460
3.3121
3.2397
3.1699
3.0374
2.9137
2.8550
2.7982
2.5887
5
4.5797
4.3295
3.9927
3.8897
3.7908
3.6048
3.4331
3.3522
3.2743
2.9906
6
5.4172
5.0757
4.6229
4.4859
4.3553
4.1114
3.8887
3.7845
3.6847
3.3255
7
6.2303
5.7864
5.2064
5.0330
4.8684
4.5638
4.2883
4.1604
4.0386
3.6046
8
7.0197
6.4632
5.7466
5.5348
5.3349
4.9676
4.6389
4.4873
4.3436
3.8372
9
7.7861
7.1078
6.2469
5.9953
5.7590
5.3283
4.9464
4.7716
4.6065
4.0310
10
8.5302
7.7217
6.7101
6.4177
6.1446
5.6502
5.2161
5.0188
4.8332
4.1925
12
9.9540
8.8633
7.5361
7.1607
6.8137
6.1944
5.6603
5.4206
5.1971
4.4392
15
11.9379
10.3797
8.5595
8.0607
7.6061
6.8109
6.1422
5.8474
5.5755
4.6755
16
12.5611
10.8378
8.8514
8.3126
7.8237
6.9740
6.2651
5.9542
5.6685
4.7296
17
13.1661
11.2741
9.1216
8.5436
8.0215
7.1196
6.3729
6.0472
5.7487
4.7746
18
13.7535
11.6896
9.3719
8.7556
8.2014
7.2497
6.4674
6.1280
5.8178
4.8122
19
14.3238
12.0853
9.6036
8.9501
8.3649
7.3658
6.5504
6.1982
5.8775
4.8435
20
14.8775
12.4622
9.8182
9.1286
8.5135
7.4694
6.6231
6.2593
5.9288
4.8696
21
15.4150
12.8212
10.0168
9.2922
8.6487
7.5620
6.6870
6.3125
5.9731
4.8913
25
17.4132
14.0939
10.6748
9.8226
9.0770
7.8431
6.8729
6.4641
6.0971
4.9476
Present Value of a Lump-Sum
Explanation / Answer
Computation of net present value
Years Cash inflows Annuity value@20% PV of cash flows
1 to 10 60000 4.1925 251550
less: initial investment (160000)
NPV 91550.
NPV is positive so, accept the project.