September/December 2019 – Sample Questions – Question 1

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

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November 29, 2020 at 4:27 pm #597026
mawais263
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Dear Sir,
With reference to Q1, base case NPV of Alpha, it is mentioned in question that sales and expenses are going to start in 6 months time, are we not supposed to adjust discount factor to 6 months for 1st cashflow and then 18 months, 30 months and so on? In the answer, they have just used annual 10% discount rate.

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November 30, 2020 at 10:00 am #597092
John Moffat
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No. The question asks for the NPV in six months time (not the NPV ‘now’).
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