Phan nhu y qs170067 fin202 ib17b02 individual assignment (1)

1

Fundamental of Corporate Finance

FIN202: Fundamental of Corporate Finance

Individual Assignment

Chapter 10: 10.1 – 10.5

10.1 Net present value: Riggs Corp. management is planning to spend $650,000 on a new marketing

campaign. They believe that this action will result in additional cash flows of $325,000 over the next

three years. If the discount rate is 17.5 percent, what is the NPV on this project?

Solution:

NPV = NCF0 +

NCF1

(1+k )

+

NCF2

(1+k )

2

+

NCF3

(1+k )

3

IB17B02