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NPV

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › NPV

  • This topic has 4 replies, 2 voices, and was last updated 2 years ago by John Moffat.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • May 24, 2023 at 12:24 pm #684940
    weekly
    Participant
    • Topics: 38
    • Replies: 39
    • ☆☆

    Dear Tutor. In a question in bpp practice and revision kit I was ask to give NPV to the nearest whole thousand. We both got NPV $48490. I round it to $48000 because it’s less than $48500. But the book rounded it to $49000. Is my answer wrong.

    May 24, 2023 at 4:30 pm #684954
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Normally I would say that you are correct. However I really need to know exactly what the question was asking just to be sure.

    May 25, 2023 at 11:15 am #685017
    weekly
    Participant
    • Topics: 38
    • Replies: 39
    • ☆☆

    HF Co is considering two different (mutually exclusive) investment options, investment A and investment B.
    (a)A net present value (NPV) table has been partially completed for investment A.
    Required
    Complete the present values to two decimal places for each cash flow, using a discount rate of 10%.

    Year Cash flow($000) Present value($000)
    0 (350)
    1 50
    2 110
    3 130
    4 150
    5 100

    (b)What is the net present value of investment A to the nearest whole thousand dollars?

    May 25, 2023 at 11:23 am #685018
    weekly
    Participant
    • Topics: 38
    • Replies: 39
    • ☆☆

    Sorry if the question did not appear as I typed it. When I submit my query the space was omitted. Below year there is (0,1,2,3,4,5). Next to year there is cash flow($000) and Below cash flow ($000) ((350),50,110,130,150,100). And next to cash flow there is present value ($000) with nothing below

    May 26, 2023 at 8:28 am #685091
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    It seems like you are correct, but don’t worry – in the real exam, because of rounding, the computer is programmed to accept a small range of answers.

  • Author
    Posts
Viewing 5 posts - 1 through 5 (of 5 total)
  • The topic ‘NPV’ is closed to new replies.

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