# Net Present Value watch

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1. Can anyone help me answer this question?
Suppose an investment opportunity with a cash flow of \$3000 each year for the first 3 years, and \$2000 from year 4 in perpetuity. With initial investment of \$18000. What is the NPV of the investment if r=10% ?

I know that you have to derive the first 3 years and then at year 3 using the formula C/r, then derive the PV. But i still get the wrong answer.
Help? ;S
Can anyone help me answer this question?
Suppose an investment opportunity with a cash flow of \$3000 each year for the first 3 years, and \$2000 from year 4 in perpetuity. With initial investment of \$18000. What is the NPV of the investment if r=10% ?

I know that you have to derive the first 3 years and then at year 3 using the formula C/r, then derive the PV. But i still get the wrong answer.
Help? ;S
I've moved this to the Accounting and finance study help forum
Can anyone help me answer this question?
Suppose an investment opportunity with a cash flow of \$3000 each year for the first 3 years, and \$2000 from year 4 in perpetuity. With initial investment of \$18000. What is the NPV of the investment if r=10% ?

I know that you have to derive the first 3 years and then at year 3 using the formula C/r, then derive the PV. But i still get the wrong answer.
Help? ;S
Still need help with this question?

Remember that the perpetuity itself needs to be discounted back to year 1 - this is where you are most likely going wrong.

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