46. The project has the following annual cash flows:

Year 0 | Year 1 | Year 2 | Year 3 | Year 4 |

- 85,540 | $42,100 | $23,025 | $30,200 | $16,000 |

- Option : B
- Explanation :
**Year****Cash flow****Discounted cash flow****[ CFn / (1.07)^n ]****Cumulative discounted****cash flow:****[CF0 – Cumulative PV****cash flows]**0 -85,540 -85,540 -85,540 1 42,100 39,346 -46,194 2 23,025 20,111 -26,083 3 30,200 24,652 -1,431 4 16,000 12,206 The discounted payback is 3.1 years: [ 3 + (1,431 / 12,206) ].

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- Option : A
- Explanation : NPV = -100 + 50/1.15 + 60/(1.15)^2 + 120/(1.15)^3 + 150/(1.15)^4 = 153.51.

Using a financial calculator, enter the cash flows.

CF0 = - 100, CF1 = 50, CF2 = -60, CF3 = 120, CF4 = 150, I = 15, CPT NPV.

NPV = 153.51.

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49. Given below are the cash flows for a capital project. The required rate of return is 10 percent.

Year | 0 | 1 | 2 | 3 | 4 | 5 |

Cash flow | (75,000) | 25,000 | 30,000 | 30,000 | 15,000 | 7,500 |

- Option : B
- Explanation :

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50. A project has the following annual cash flows:

Year 0 | Year 1 | Year 2 | Year 3 |

-450,000 | -1,000,000 | 1,000,000 | 1,000,000 |

- Option : C
- Explanation : Enter the following values in a financial calculator: CF0 = -450,000, CF1 = -1,000,000, CF2 = 1,000,000, CF3 = 1,000,000, CPT IRR. IRR = 19.47%.

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