Mock Exam Section B Q31

Hi John

My issue is with regards to Mock Exam Section B Q31 :

Able Ltd is considering a new project for which the following information is available:
Expected life 5 years Estimated scrap value $20,000 Additional revenue from the project $120,000 per year Incremental costs from the project $30,000 Cost of capital 10%

I have seen your following reply (which i couldn’t reply to it, hence a new topic)

“The scrap is an inflow of 20,000 in 5 years time, so discount this using the present value discount factor for 5 years at 10%.

The net cash inflow each year is 120,000 – 20,000 = 90,000 per year for 5 years, so discount this using the annuity factor for 5 years at 10%.”

Where I got confused:

When I discount 90k for 5 years and additional 20k (scrap value) at Y5 at 10% by using the discount factor instead of annuity, I get a different total.

This is what I did and failed in this question:
Y1 90000 x 0.909 = 81,810
Y2 90000 x 0.826 = 74,340
Y3 90000 x 0.751 = 67,590
Y4 90000 x 0.683 = 61,470
Y5 (90000 + 20000) x 0.621 = 68,310
TOTAL = 353,520
NPV = 353,520 – 300,000 = 53,520

This is the answer:
Y1-Y5 90,000 x 3.791 = 341,190
Y5 20000 x 0.621 = 12,420
TOTAL = 353,610
NPV = 353,610 – 300,000 = 53,610

Apologies if I am missing a very obvious error of mine. Really appreciate if you could clear this up for me.

Thanks
Regards
Mia