NPV

abbreviation for

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Examples have not been reviewed.

In this example, we know that 10 percent is not the IRR because it did not make the NPV zero.

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Lowering the interest rate makes the NPV higher.

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One more calculation using a 14 percent interest rate gets us an NPV of $100.88, which we determine to be close enough.

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If we try nine percent, we get an NPV of $105.50.

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If we try an interest rate of 12 percent, we get an NPV of $102.68.

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