Python Exercises for Corporate Finance and Risk Management

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Question: 100

Q: In the previous question (99), if you use a constant risk-adjusted discount rate, what is the value of the PV of the project.

Follow the question number 99, to get the data, we have cash flow, and risk free rate given in last question. cash flow = [110, 121] risk free rate = 10%

  • define a function with the name "present_value_of_project", which will will take two arguments, cash flows and risk free rate.
  • The signature of the function should be like:

    def present_value_of_project(cfList,r):

(We will use an inbuilt function "cList" for cash flows, it will automatically take cashflows on per year basis)

  • Use "cList" to access the cashflows, it will work as array.
  • define R = (1/(1+r))
  • set i = 0, PV = 0
  • Use while loop, to get access if cash flow and discount it with given risk free rate over given time period.
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