Using NPV when project is delayed

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

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
March 4, 2024 at 7:24 am #701888
guyver101
Participant
- Topics: 33
- Replies: 27
Hi, I’m a bit confused.
In Washi question, the project start is actually 1 year on. ie year 0 is year 1 and so on
Therefore if using NPV function I would have thought that you could do NPV at 12% of all the cash flows (T0-T4), rather than NPV T1-T4 and adding T0 on at the end?
In BPP solution although they have converted FX for T0 at the PPP expected in T1, they haven’t discounted T0. Seems like its one rule for FX, but another for discounting?
Thanks
March 4, 2024 at 8:26 am #701904
John Moffat
Keymaster
- Topics: 57
- Replies: 54843
It is because requirement (c)(ii) specifically asks for the NPV to be calculated based on the end of year one being the start of the project.
The cash flows used are converted at the exchange rates applicable at the time of the cash flows.
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.