Question

calculate the net present value of a business deal that cost $2500 today and will return $1500 at the end of this year. use interest rate of 13%

Answer 1

NPV= -$1,172.57

Step-by-step explanation:

Giving the following information:

Initial investment= $2,500

Cash flow= $1,500

Discount rate= 13%

To calculate the net present value (NPV), we need to use the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

NPV= -2,500 + (1,500/1.13)

NPV= -1,172.57