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75 blipton

This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.

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February 14, 2017 at 4:48 pm #372396
shilpamary
Member
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in return phase calculation how did we get 54.63, 527.68 what nominal rate is used? when i used 9% i didnt get these answers and why we have multiplied with nominal rate when cash flow arent inflated?
2) may i know which all sums are added to get 13010 (present value of return phase? why value of investment phase too added with cash inflows to get present value of return phase in section 2 calculation?
February 15, 2017 at 7:28 am #372449
John Moffat
Keymaster
- Topics: 57
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I have no idea why you want to use 9%.
UK inflation is 2.5% and so operating flows will increase at 2.5% per year.
52 x 1.025^2 = 54.65
490 x 1.025^3 = 527.68
The PV of the investment phase = 50.07 + 453 + 1987 + 789 + 9731 = 13010
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