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[DOC File]ECON366 - KONSTANTINOS KANELLOPOULOS
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at the end of the first year; this payout grows at the rate of 10% per year for 11 years. If your discount rate is 15%, calculate the smallest . X . which would entice you to purchase the asset. For example, as you can see in the following display, X = $100 is too small—the NPV is negative:
appropriate discount rate for npv

A Refresher on Net Present Value
future cash flows in the NPV analysis. Quick review from Chapter 2 notes : Assume a project requires a $10,000 initial investment that will produce a time one cash flow of either $11,000 (90% probability) or $6000 (10% probability). Based on its risk, the appropriate discount rate is 8%.
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[DOC File]Chapter 1 Discounted Cash Flow Techniques
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Net Present Value and Other Investment Criteria. ... At this discount rate, NPV = $0. c. Payback period = 10 years. ... One reasonable approach would be to assess a cost to the space equal to the rental income that the firm could earn if it allowed another firm to …
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[DOC File]Crossing the Digital Divide: Cost-Effective Broadband ...
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Where there is a research-related reason for using a different discount rate, the analysis can be presented at that discount rate in addition to the 3, 7 and 10 per cent scenarios described above. Harrison (2010), among others, provides a more detailed discussion of the issues surrounding the choice of discount rate.
discount rate and npv

[DOC File]Solutions to Chapter 1
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She decided to check her results with a more reasonable discount rate, say 15%. Libby used her spreadsheet to conduct a sensitivity analysis, assuming for simplicity that the optimistic and pessimistic probabilities were each 25%: Steady-State Sales $ millions Probability NPV at. 25%, $ millions NPV at
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[DOCX File]Weebly
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We compared the results for Case B, by varying the discount rate between 10% and 25%. Results in Table 3 (b) indicate that though the years to break even are the same, the NPV decreases significantly as the discount rate rises, but still remains positive. 6. Conclusions
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[DOCX File]Seattle Pacific University
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The IRR of a project equals the discount rate at which the project’s NPV = 0. The IRR indicates the annual rate of return that would be derived from an equivalent project of similar size and similar duration. When there is only one alternative to the status quo, one should invest in the project if its IRR > social discount rate.
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Reasonable discount rate for npv