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In Furlion solution 15m is discounted at 12% and as NPV is zero pa =10.6767m.
In Talam 60m is not discounted and future cash inflow is calculated as 70m and 70m is then discounted to give 46.111m and this is pa
Why is it wrong to discount the 60m in Talam first and add 10m to the result in order to get the pa?
i don’t understand why the two solutions don’t follow the same format.Many thanks
The $10,000 is the PV in 4 years time, not the PV ‘now’. Therefore the PV of the future cash flows is $70,000 in 4 years time, and not the PV now.
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