- This topic has 4 replies, 2 voices, and was last updated 5 years ago by
.
Viewing 5 posts - 1 through 5 (of 5 total)
-
Posts
-
It is mentioned in the question it takes one year time for approval and manufacturing and sales will commence only after that one year. so is it wrong to assume the initial one year needed for the approval as year 0?
Please tell me which years exam the question is from. (Sorry, but I cannot remember the name of every question there has ever been 🙂 )
For part (i) of the question you could have the cash flows starting at time 0. The NPV will be different but will still be positive and so the conclusion will be the same.
However parts (ii) and (iii) specifically ask for the NPV and so it the first cash flow is in 1 years time then it needs discounting for a year.
Viewing 5 posts - 1 through 5 (of 5 total)
- You must be logged in to reply to this topic.