Page 28 - FINAL CFA SLIDES JUNE 2019 DAY 2
P. 28
LOS 7.a: Calculate and interpret the Session Unit 2: Discounted Cash Flow Applications
net present value (NPV) and the
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.
