Homework Answers
ANSWER = $127,487.98
|
YEAR |
CASH INFLOW | PVIF @ 13% | PV OF CASH INFLOW |
| 1 | 200,000 | 0.8850 | 177,000 |
| 2 | 400,000 | 0.7831 | 313,240 |
| 3 | 300,000 | 0.6931 | 207,930 |
| 4 | 700,000 | 0.6133 | 429,310 |
| 1,127,480 |
PV of cash inflows = 1,000,000
PV of cash outflows = 1,127,480
NPV = PV of cash inflows - PV of cash outflows
NPV = 1,127,480 - 1,000,000
NPV = $127,480
There is a minor difference in the calculated value and the value given in option due to decimal places and rounding-off.
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