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In Talam, for the Jigu project, we are givent that in 4 years time they will spend 60000 and NPV of the 5 year project is 10000
So, Year 1 2 3 4 5 6 7 8 9
-60000NVP – PV of cash flows – cost
Should we not discount -60000 with year 4 discount factor which gives $39523 and then add with 10000?I do not understand why are they not discounting the 60000 cost as that is in 4 years time, i understand at the end they discount with year 4 discount factor to bring it to Year 0 but why take 60000 and not discount?
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