1

Net Present Value: Worksheet on 3/31

FV = (PV)(1+r)T

FV = (50,000)(1.04)10

FV = 74,012.21

FV = future valuePV = present valuer = interest rateT = # years

#1

2

Net Present Value: Worksheet on 3/31

PV = (FV)(1+r)(-T)

PV = (80,000)(1.04) (-10)

PV = 54,045.13

FV = future valuePV = present valuer = interest rateT = # years

#2

3

Time Costs Revenues

Present Value of Revenues - Costs

Today 200,000

0

Year 1 80,000Year 2 80,000Year 3 80,000All

Net Present Value: Worksheet on 3/31#3

4

Time Costs Revenues

Present Value of Revenues - Costs

Today 200,000

0 –200,000.00

Year 1 80,000 (80,000)(1.04)(-1) = Year 2 80,000 (80,000)(1.04)(-2) = Year 3 80,000 (80,000)(1.04)(-3) = All = -200,000 + 76,923.08 +

3,964.50 + 71,119.71 = 22,007.28

Net Present Value: Worksheet on 3/31#3

5

Time Costs Revenues

Present Value of Revenues - Costs

Today 200,000

0 –200,000.00

Year 1 80,000 (80,000)(1.04)(-1) = 76,923.08

Year 2 80,000 (80,000)(1.04)(-2) = 73,964.50

Year 3 80,000 (80,000)(1.04)(-3) = 71,119.71

All = -200,000 + 76,923.08 + 73,964.50 + 71,119.71 = 22,007.28

Net Present Value: Worksheet on 3/31#3