The Excel Formula to Compute the Net Present Value of Cash

question 36

Multiple Choice

The Excel formula to compute the net present value of cash flows for a $55,000 investment (−55,000 at year zero) and cash inflows of $20,000 per year for years 1 through 4, using a 4% discount rate is:

• A) =NPV(0.04,−55000,20000,20000,20000,20000)
• B) =NPV(−55000,20000,20000,20000,20000,0.04)
• C) =NPV(0.04, 55000,−20000,−20000,−20000,−20000)
• D) =NPV(55000,−20000,−20000,−20000,−20000,0.04)