Hi Mr. Maffot,
Please I am having a hard time figuring this question out. Tried Annuity and Present value tables but I'm not getting the answer. Can you please explain the answer to me.
Able Ltd is considering a new project, the details of which are attached.
a) Calculate the Net Present Value of the project (to the nearest %).
Information:
Initial cost – $300,000
Expected life – 5 years
Estimated scrap value – $20,000
Addition revenue from the project – $120,000 per year
Incremental costs of the project • $30,000 per year
Cost of capital – 10%
Ask the Tutor ACCA MA
Net Present Value
4y ago#1The flows are as follows:
Time 0 (300,000)
1 to 5 90,000 per year. (120,000 - 30,000)
6. 20,000
Does that help?
Sign into reply to this topic.