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NPV

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › NPV

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • February 25, 2017 at 12:41 am #374077
    sal2222
    Member
    • Topics: 44
    • Replies: 93
    • ☆☆

    Apologies for coping and pasting the question below from another question and answer. You said the difference to the below was due to rounding in the table. But I’ve used the figures from the table you provided in the notes. Why am I getting 53520. I’m worried I will get this wrong in the exam due to rounding.

    In the mock exam there is a question to calculate the NPV, however this question includes inflows and outflows in every year. I took the net (Inflow less outflow) p.a and calculated that based on the NPV table in every year.
    I have done the question several times but my answer is always incorrect (I have NPV of +$53,520) the answer when I review is +$53,610 – This is a small difference and I wonder if the NPV table with only 3 decimals could cause this?

    The question is as follows:
    Initial investment $300,000
    Inflow per annum $120,000
    Outflow (Incremental cost) per annum $30,000
    Scrap value $20,000

    February 25, 2017 at 10:51 am #374121
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54798
    • ☆☆☆☆☆

    There will not be a problem with this in the exam.

    The examiner is aware of the possible rounding problems and so will ask (for example) for the NPV to the nearest thousand – so as to avoid the problem 🙂

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘NPV’ is closed to new replies.

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