Originally Posted by
MrGreedy Hi,
I'm working on a question that compares health care plans for employees of a business for 5 years.
There are 4 different health care plans on offer and each have differing costs.
The question asks to compare using their net present value.
If the discount rate is 6% and the first health care plan costs 182,000 payable after the first year and then each subsequent year, is the NPV:
Year 1: 182000 * (1+0.06)^-1
Year 2: 182000 * (1+0.06)^-2
Year 3: 182000 * (1+0.06)^-3
Year 4: 182000 * (1+0.06)^-4
Year 5: 182000 * (1+0.06)^-5
Total = NPV ?
Please help. Confused. Thanks