In Exercise 2.4 it tells you that the discount rate is 10%.  Through my studying for the FM exam I know that what they call the discount rate (usually denoted 'd') something different...  d = i / (1+i)

Just for clarification, everytime you talk about the discount rate for homework, tests, etc.  You will be meaning the interest rate used to discount the payments correct?  Just making sure this terminology will not switch back and forth.

I assumed it meant 700 at the end of year 1, 2, and 900 and the end of year 3. Discounted back at a rate of 10%. I got an NPV of -108.94. It says the discount rate is 10% but I Don't believe it means D=.10 therefore I=.0909.  Judging from the sample problems and solutions I believe it means the rate at which it's discounted backwards should be 10% meaning your interest rate is actually 10%.

-2000 now

+700(1/1.1)

+700(1/1.1)^2

+900(1/1.1)^3

-108.94 NPV......of course i could be wrong