CFA Practice Question

There are 481 practice questions for this topic.

CFA Practice Question

Michael undertakes an investment with an initial investment of $10,000, and he expects to receive $3,500 a year for the next four years. If the required return is 15%, what is the NPV?

A. $5.49
B. $4.63
C. -$7.58
Correct Answer: C

User Contributed Comments 7

User Comment
zhaojiang FV=0, N=4, I/Y=15, PMT=3,500 CPT PV=9,992.42 NPV=-$10,000+$9,992.42=-$7.58
thekapila on BAII
CF0 10000
CF1 3500 F01 = 4
I = 15
CPT NPV = -7.58
julescruis Whenever cash flow are constant we should use the calculation method presented by zhaojiang as it is quicker
mattg I love my HP12C! Anyone using the BAII, I advise you to throw it in the trash immediately and go get the HP

I started on the BAII and it broke so I switched ... MUCH more intuitive, plus the buttons take effort to push so not so many mis-pressed keys!
johntan1979 It's never about which calculator is better but WHOSE hands it is in.
jonan203 jt1979 is right, but i love me some HP12C doggystyle polish action...
jlizzy unsure what required rate of rtn is here? does this indicate how much it will cost to borrow money ($10k)?
You need to log in first to add your comment.