How do we get 20% in the second question while discounting?I understand the questions given in the notes have given different percentage figures. I don’t understand how to apply it here.
As I explain in my free lectures (and as the answer to this question explains) you can use any two rates of interest – it does not have to be 12% and 20%.
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How do we get 20% in the second question while discounting?I understand the questions given in the notes have given different percentage figures. I don’t understand how to apply it here.
As I explain in my free lectures (and as the answer to this question explains) you can use any two rates of interest – it does not have to be 12% and 20%.
thanks sir!
You are welcome 馃檪
Why we used operating profits for payback in this question?where payback should be calculated on returns….
Payback period should be calculated using the cash flows, as explained in our free lectures.
If you are referring to question 1, then the question has given the operating cash flows and not the operating profits.
In this question, isn’t the NPV negative?
(33,830)
It is positive