00:01
This question is missing certain information, so i'm not able to count everything until the end because you are missing what we call the r, this count rate.
00:16
But i'm going to show you how to calculate it, and you can actually use a calculator to calculate yourself once you have the information.
00:25
So first of all, let's calculate mpv.
00:28
Npv is the net present value.
00:32
So what you're going to do is it's the sum of the cash flow ct divided by 1 plus the discount rate that we're missing here.
00:43
This is missing.
00:44
So i'm not able to calculate them all, but i'll use r to put it there.
00:50
And then to the t power, which means the number of years, and then minus c zero, which is initial cash flow.
01:00
So let's plug in all the numbers before we calculate the final answer.
01:08
So we know that year 1 is 3526 -6 -670.
01:13
So it's going to be 35 -2 -6 -670 divided by 1 plus r.
01:26
Remember, you're going to have to have your discount rate in decimal format, and this is year number one.
01:32
And then year number two is 5078 404 divided by 1 plus r to the second power because this is the year 2.
01:50
Then you keep going 7 312902 divide by again 1 plus the discount rate this is the third year and then you just keep going and and that's 10, 530, 579, divided by 1 plus the discount rate, 4th power.
02:25
Then the last year is $1 ,16434 ,034 divided by 1 plus r to the fifth power.
02:39
And you're going to minus the initial cash flow.
02:44
4 million.
02:46
So again without knowing the r i'm not able to calculate that value till the end.
02:52
But you can always plug in your discount value and use the calculator to calculate the final answer by plugging the right r...