Page 27 - FINAL CFA SLIDES JUNE 2019 DAY 2
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LOS 7.a: Calculate and interpret the
net present value (NPV) and the Session Unit 2: Discounted Cash Flow Applications
internal rate of return (IRR) of an investment.
Example: Computing NPV: Calculate the NPV of an
investment project with an initial cost of $5 million and
positive cash flows of $1.6 million at the end of Year 1,
$2.4 million at the end of Year 2, and $2.8 million at the
end of Year 3. Use 12% as the discount rate.
