Compute the net present value for a project with a net investment of Rs. 1,00,000 and net
cash flows year one is Rs. 55,000; for year two is Rs. 80,000 and for year three is Rs.
15,000. Further, the company's cost of capital is 10%?
(PVIF @ 10% for three years are 0.909, 0.826 and 0.751)
Answers
Answer:
Given: An = Rs. 10
i = 10% = 0.1
n = 2
Present Value = An/(1 + i)n
= 10(1+0.1)2
= 10/1.21 = 8.264
= Rs. 8.264
Therefore, the growth after 2 years at an interest rate of 10% will be Rs. 8.264 compounded annually.
Present Value for Multiple Time Period
Calculating the present value for multiple periods is a useful way to calculate the earnings overall. Here is the formula to calculate present value for “n” number of time periods.
Step-by-step explanation:
I give you answer now it is your duty to mark me as a brianliest please follow me
Answer:
So, In this question
it is given that net investment is 1,00,000 rs.
Now, You assume that this is the amount you have invest in the business is 1,00,000 rs.
You notice that in
1st year. you get. 55,000 rs. ,calculate it's present value that is. 55,000 x 0.909 (Given) =49,995
similarly ,for second year
80,000 x 0.826( given) = 66,080
for third year
15,000 x 0.751 = 11,265
Now ,Total amount you received against 1,00,000 is ( 49,995 + 66,080 + 11,265) = 1,27,340
So, total net present value is. (1,27,340-1,00,000) =27,340 rs.