Digunder Dec 2007

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July 31, 2016 at 6:53 pm #330454
sattar786
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Hello sir, could you kindly tell me as in how did the examiner get the current price as $ 28million, since we’re told that npv is $4 million at cost of capital of 10% p.a
July 31, 2016 at 8:44 pm #330474
John Moffat
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The NPV is $4M, the initial cost is $24M, and therefore the PV of the receipts must be 4 + 24 = $28M.
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