Finance Assignment
NPV
| Net Present Value and Real Value | |||||||||||
| Good Results | Time | ||||||||||
| 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |
| Cash flows | -$50,000,000 | $15,000,000 | $15,000,000 | $15,000,000 | $15,000,000 | $15,000,000 | $15,000,000 | $15,000,000 | $15,000,000 | $15,000,000 | $15,000,000 |
| Bad Results | Time | ||||||||||
| 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |
| Cash flows | -$50,000,000 | $2,000,000 | $2,000,000 | $2,000,000 | $2,000,000 | $2,000,000 | $2,000,000 | $2,000,000 | $2,000,000 | $2,000,000 | $2,000,000 |
| Good Results | Bad Results | ||||||||||
| NPV | $42,168,506.59 | NPV | -$37,710,865.79 | ||||||||
| Real Options | |||||||||||
| 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |
| Cash flows | -$50,000,000 | $8,500,000 | $8,500,000 | $8,500,000 | $8,500,000 | $8,500,000 | $8,500,000 | $8,500,000 | $8,500,000 | $8,500,000 | $8,500,000 |
| Real Options | |||||||||||
| $2,228,820.40 | |||||||||||