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.
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NPV
3y ago#1Normally I would say that you are correct. However I really need to know exactly what the question was asking just to be sure.
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?
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
3y ago#4It 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.
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