CAIE A-Level Business 10.3.3 Net Present Value

CAIE A-Level Business 10.3.3 Net Present Value
Cambridge International AS & A Level Business 9609 syllabus for exams in 2026, 2027 and 20282026–2028

Practise multiplying each future cash flow by its discount factor, subtracting the initial investment and interpreting positive or negative NPV as part of an investment decision.

How this is tested

  • multiply each year's net cash flow by the matching discount factor before summing present values
  • subtract the initial investment from total discounted cash flows and retain the correct sign
  • interpret positive or negative NPV relative to the discount rate without treating it as the only criterion

Question 3(b)

[Maximum number: 2]

Using the data in Table 1.1, calculate the net present value (NPV) over six years discounted at 8%.