# discount rates the produce zero NPV

how do i calulate this?? CF -50, 100, 0 , - 50 how many discount rates produce a zero NPV for this project? I know one of them is zero… how do i get the other?

Solve the cubic equation. 50(1+r)exp3 -100(1+r)exp2 +50 = 0 Finding the roots of a cubic equation is not straightforward. It can have all real roots or 1 real and 2 complex conjugate roots. just out of curiosity, will such questions be asked in the exam?

I doubt it. Test problems are very straightforward and require little to no calculation. A trial and error problem like this would seem out of place.

substitute the answers provided into the question to get a zero npv… you do not need to solve the equation… it is at most 3 substitutions… and since you know one answer is right - you can eliminate 1 choice (say Choice a by substitution), and then select one of the others based on the direction you have to move. if you have a positive NPV after substituting say 10% - you need to move higher, else move lower…