# Quantitative Methods - Quantitative Methods Section 1

>>>>>>>>Quantitative Methods Section 1

 Year 0 1 2 3 4 Cash flow (€) -50,000 25,000 20,000 10,000 3,000

• A

-2,710.  • B

1,535.  • C

3,804.  • Option : A
• Explanation : Enter the given cash flows and the given discount rate into a financial calculator and solve for NPV. CF0 = –50,000, CF1 = 25,000, CF2 = 20,000, CF3 = 10,000, CF4 = 3,000, i = 12%. Compute PV. The NPV is –2,710.

• A

No, the project is not worth the investment.  • B

Yes, the project is worth the investment.  • C

Additional information is required to make the decision.  • A

\$11,833.  • B

-\$19,722.  • C

\$769,722.  • Option : B
• Explanation : Using a financial calculator, enter the following cash flows to compute NPV. CF0 = -750,000; CF1 = 200,000; CF2 = 300,000; CF3 = 400,000; I = 10; CPT NPV = -19,722.

• A

No, the project is not worth the investment.  • B

Yes, the project is worth the investment.  • C

Additional information is required to make the decision.  • A

8.65%.  • B

10.00%.  • C

11.00%.  • Option : A
• Explanation : Using a financial calculator, enter the following cash flows to compute IRR. CF0 = -750,000, CF1 = 200,000, CF2 = 300,000, CF3 = 400,000, CPT IRR = 8.65%.