Exer1 - Option1 Discount rate 8 Year Infow Outflow Net Flow Dic Fac Disc Netflow A B C D=(B-C 1(1 k)^t D(Disc Fact 0 0 100,000-100,000 1-$100,000 1

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Option1 Discount rate 8% Year Infow Outflow Net Flow Dic. Fac Disc. Netflow A B C D=(B-C) 1/(1+k)^t D * (Disc. Fact) 0 0 100,000 -100,000 1 -$100,000 1 $18,000 $0 $18,000 0.93 $16,667 2 $18,000 $0 $18,000 0.86 $15,432 3 $18,000 $0 $18,000 0.79 $14,289 4 $18,000 $0 $18,000 0.74 $13,231 5 $18,000 $0 $18,000 0.68 $12,250 6 $18,000 $0 $18,000 0.63 $11,343 7 $18,000 $0 $18,000 0.58 $10,503 8 $18,000 $0 $18,000 0.54 $9,725 9 $18,000 $0 $18,000 0.5 $9,004 10 $18,000 $0 $18,000 0.46 $8,337 Total $180,000 $100,000 $80,000 $120,781 NPV $20,781 F4 + F16 Option 2 Discount rate 8% Year Infow Outflow Net Flow Dic. Fac Disc. Netflow A B C D=(B-C) 1/(1+k)^t D * (Disc. Fact) 0 0 100,000 -100,000 1 -$100,000 1 $13,000 $0 $13,000 0.93 $12,037 2 $13,000 $0 $13,000 0.86 $11,145 3 $13,000 $0 $13,000 0.79 $10,320 4 $13,000 $0 $13,000 0.74 $9,555 5 $13,000 $0 $13,000 0.68 $8,848 6 $13,000 $0 $13,000 0.63 $8,192 7 $13,000 $0 $13,000 0.58 $7,585 8 $13,000 $0 $13,000 0.54 $7,023 9 $13,000 $0 $13,000 0.5 $6,503 10 $13,000
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This note was uploaded on 01/02/2010 for the course EMSE 231 taught by Professor Bada during the Fall '09 term at GWU.

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Exer1 - Option1 Discount rate 8 Year Infow Outflow Net Flow Dic Fac Disc Netflow A B C D=(B-C 1(1 k)^t D(Disc Fact 0 0 100,000-100,000 1-$100,000 1

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