An org. Is planning to invest 6,000,000 in Nig. Stock exchange market with an expectant of 700,000 cash in flow for the next 10years at 15% rate.
1. You are required to determine the net present value of the investment
2. Determine the payback period of the investment.
Answers
Answer:
income from the third, find the amount of each investment by using determinant methods.
Medium
Solution
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Let investments be x, y, z.
x=
100
6×5000
=300
y=
100
7×5000
=350
z=
100
8×5000
=400
Now,
6x+7y+8z=100 ………(1)
x+y+z=358 ……(2)
x+y−z=70 ………(3)
Δx=B
⎣
⎢
⎢
⎡
6
1
1
7
1
1
8
1
−1
⎦
⎥
⎥
⎤
⎣
⎢
⎢
⎡
x
y
z
⎦
⎥
⎥
⎤
=
⎣
⎢
⎢
⎡
100
358
70
⎦
⎥
⎥
⎤
=Δ=
∣
∣
∣
∣
∣
∣
∣
∣
6
1
1
7
1
1
8
1
−1
∣
∣
∣
∣
∣
∣
∣
∣
=(−6+8+7)−(8+6−7)
=9−7=2
Δ
1
=
∣
∣
∣
∣
∣
∣
∣
∣
100
358
70
7
1
1
8
1
−1
∣
∣
∣
∣
∣
∣
∣
∣
=(−100+358×8+490)−(560+100−7×358)
=−70+15×358
=5300
Δ
2
=
∣
∣
∣
∣
∣
∣
∣
∣
6
1
1
100
358
70
8
1
−1
∣
∣
∣
∣
∣
∣
∣
∣
=(−6×358+100−560)−(8×358+420−100)
=−14×358+660−320
=−4672
Δ
3
=
∣
∣
∣
∣
∣
∣
∣
∣
6
1
1
7
1
1
100
358
70
∣
∣
∣
∣
∣
∣
∣
∣
=(1420+100+7×358)−(100+6×358+490)
=288
x=
Δ
Δ
1
=
2
5300
=2650
y=
Δ
Δ
2
=
2
−4672
=2336
z=
Δ
Δ
3
=
2
288
=144
Amount of each investment is Rs. 2650, Rs. 2336, Rs. 144.