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Sir while calculating discount factor at 10
In bpp solution its given as
.909 .826 .751 14.11*.751 and in last its 0.043 can you please tell me from where did this last figure 0.043 come .ThanksThe decommissioning takes place in 33 years time.
So…the since the cash flow is at current prices, to inflate it we multiply by 1.04^33
We then discount it at 10% and since 33 years is not in the tables, it means we have to use the formula for the discount factor. 33 years at 10% gives a discount factor of 1/((1.10)^33) which equals 0.043
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