Question 2.

Interest Rate 13.00%

Year 0 1 2
Net Cash Flow -$2,500 $1,500 $1,700

NPV $158.78

The net present value of the business deal is $158.78

Question 2.10

Interest Rate 12.00%

Year 0 1 2 3
Net Cash Flow $0 -$12,000 $5,000 $5,000

NPV $2,003.90

Interest Rate 19.19%

The net present value of the cash flow is $2003.90, and the interest rate
that gives a net present value of zero for the cash flow is 19.19%.
 4 5 6
-$2,000 $6,000 $6,000
Plastics Recycling Business
Venture Capitalist Results

Year 0 1 2 3
Cash Flow 1 -$500,000 $100,000 $100,000 $100,000
Cash Flow 2 $300,000 -$50,000 -$50,000 -$50,000

cngan:
Final NPV of Cash Flow -$57,819.73
This investment is not a good deal for VC bec
invest somewhere else.

Bank Cash Results

Year 0 1 2 3
Net Cash Flow -$300,000 $50,000 $50,000 $50,000

cngan:
Final NPV of Cash Flow $7,228.36
This investment is a good deal for Bank becau

My Loan Results

Year 0 1 2 3
Net Cash Flow $500,000 -$100,000 -$100,000 -$100,000

cngan:
Final NPV of Cash Flow $50,591.37
This investment is a good deal for Me because
 4 5 6 7 8 9 10 NPV
$100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 -$50,591.37
-$50,000 -$50,000 -$50,000 -$50,000 -$50,000 -$50,000 -$50,000 -$7,228.36

stment is not a good deal for VC because the final NPV is negative. It means VC should be better to
mewhere else.

4 5 6 7 8 9 10 NPV
$50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $7,228.36

stment is a good deal for Bank because the NPV is positive. It means Bank should lend the loan to VC.

4 5 6 7 8 9 10 NPV
-$100,000 -$100,000 -$100,000 -$100,000 -$100,000 -$100,000 -$100,000 $50,591.37

stment is a good deal for Me because the NPV is positive. It means I should borrow the loan from VC.