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Hi John,
1.How to calculate the reduction of selling price to make NPV Zero? The answer showing revenue X 0.75, I don’t understand where the 0.75 is from?
2. how to calculate the payback period as it is different with duration?
Many thanks
It is the after tax revenue.If the revenue changes then so to will the tax on the revenue.
Payback period is the number of years it takes to get back the original investment, in cash terms. You can find lectures on this in the Paper F2 lectures, because it revision of F2.
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