View the step-by-step solution to:

# Dennis wants to determine if the discount rate really makes any difference in the net present value of a project.

1. Dennis wants to determine if the discount rate really makes any difference in the net present value of a project. He feels that if a project is acceptable at one rate of return, it will be acceptable at all rates of return. To explain why his thinking is incorrect, you are creating an example to illustrate your point. The cash flows you are using are as follows: time zero is -\$71,000, years 1 through 4 are \$17,500 each, and years 5 and 6 are \$22,500 each. What is net present value at a discount rate of 12 percent and 17 percent?

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents