3.8.2 (HL)—Net present value Topic Practice
3.8.2 (HL)—Net present value Topic Practice
Students practise calculating net present value (NPV) using discount tables and explaining how the discount rate reflects financing cost or risk in investment decisions.
How this is tested
- calculate NPV by multiplying annual net cash flows by given discount factors and summing present values
- explain how the chosen discount rate reflects opportunity cost of capital or perceived project risk, linking it