13.15 Net present value, internal rate of return, sensitivity analysis. (20–30 min) 1a The table for the present value of annuities (Appendix B, Table 4) shows 16 periods at 14% = 3.889 Net present value = €40,000 (3.889) − €120,000 = €155,560 − €120,000 = €35,560 b Internal rate of return €120,000 = Present value of annuity of €40,000 at X % for 6 years or what factor (F) in the table of present values of an annuity (Appendix B, Table 4) will satisfy the following equation. €120,000 = €40,000F F = €120, 000 €40, 000 = 3.0 On the year line in the table for the present value of annuities (Appendix B, Table 4), find the column closest to 3.0; 3.0 is between a rate of return of 24% and 26%.
