sir my brother has invested for his tuition fee in u.s 46000 dollars that is 27,60,000 in indian rupees he has invested (cash outflow) .His cash inflow is in dollars and here are the cash inflows for the first four years
1. 72000
2. 80000
3. 85000
4.90000
interest rate 11%
NOW MY DOUBT IS SHOULD I CONVERT THE CASH INFLOWS INTO INDIAN RUPEES OR IT SHOULD BE IN DOLLARS ITSELF TO KNOW MY NET PRESENT VALUE?
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net present value
11y ago#1All the cash inflows and outflows must be in the same currency.
It does not matter whether you convert the USD to Rs or the Rs to USD (unless obviously the question specifies ). The NPV will be positive whichever currency you convert to (or negative whichever currency you convert to) so the decision would be the same whichever.
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