- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
The cash flows are as follows:
0 Initial cost (300,000) The PV of this is (300,000)
1 – 5 net inflow of 90,000 (120,000 – 30000).
To get the PV, multiply by the 5 year annuity factor at 10%
90,000 x 3.791 = 341,1906 Scrap proceeds 20,000
To get the PV of this, multiply by the 5 year present value factor at 10%.
20,000 x 0.621 = 12,420NPV = 12,420 + 341,190 – 300,000 = 53,610
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.