Dear John Sir,
Can you please help me with below question of P2. I am not able to get the logic of solving it.
A project requires an investment of $500,000 immediately. The investment will generate cash fl ow of $100,000 in year one and thenevery two years thereafter.
Using a cost of capital of 8%, what is the NPV of the project?
Options
$750,000
$100,962
$193,554
$149,038
CIMA Forums
split the perpetuity-
Hi – Thanks for your question.
Presumably you were given a model answer in the book? Can you tell me what the answer says and which part you need explaining? (this is better than me writing it all out).
Many thanks
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