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Giedruola the part 2 of example 2 inlcudes the reconciliation of MLPS and fian. lease obl. I didn’t understand the net method plz help me…
Calculate the PRESENT VALUE of the next instalemt, then the following 4 installments, and finally the last installment by using the discount factor to help you arrive at these present values
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By discounting for one year 1500 is 2727.27 and u have cal. 2,790
and if my simple method is also correct then for how many years the “more than 5 years fig” should me discounted for?I don’t see where your 2,790 comes from.
Frankly, it doesn’t really matter so long as you appreciate the technique of discounting but, if the cost of capital is 10% (I don’t have the notes readily available) then 2,727 is the discounted value of 3,000 payable in one year’s time
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