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please see two attachments one doc for questions other doc for resource. thank you
Net Present Value (NPV) and Internal Rate of Return (IRR) When it comes to calculating the net present value and internal rate of return, we are always talking
about a series of payments that are uneven. After all, if the payment amount was the same we would
just calculate the present value of an annuity (we covered that back in module 3).
Net Present Value
With the NPV, we are looking for a number; whereas with the IRR, we are looking for the return.
NPV can be calculated on a financial calculator, in excel, or by hand. NPV is very simply the present
value (PV) of Cash inflows minus the present value (PV) of Cash outflows. Let’s look at an example.
Let’s assume that you want to consider an investment of $5,000, and you are currently making 11% on
that money.Â
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