Question

Present Value of $1 Periods 1 % 0.990 0.980 4% 2% 0.980 0.961 6% 3% 0.971 0.943 0.915 0.888 8% 5 % 0.952 0.907 7% 0.935 0.873 0.816 0.763 9% G.917 10 % 12% 0.893 0.797 0.712 14% 15% 16% 0.862 18% 20% 1 0.962 0.943 0.890 0.840 0.792 0.747 0.926 0.857 0.794 0.909 0.877 0.870 0.756 0.658 0.572 0.497 0.847 0.833 2 0.925 0.842 0.772 0.708 0.650 0.826 0.751 0.683 0.769 0.675 0.592 0.519 0.743 0.718 0.609 0.516 0.437 0.694 3 0.971 0.942 0.889 0.864 0.823 0.784 0.641 0.579 0.482 0.961 0.924 0.855 0.822 4 0.735 0.636 0.567 0.552 5 0.951 0.906 0.863 0.713 0.681 0.621 0.476 0.402 0.942 0.933 0.923 0.914 0.905 6 0.888 0.837 0.813 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.705 0.665 0.666 0.596 0.547 0.502 0.456 0.400 0.351 0.630 0.564 0.507 0.432 0.410 0.370 0.314 0.335 7 0.871 0.623 0.513 0.467 0.424 0.583 0.452 0.376 0.354 0.305 0.263 0.227 0.279 8 0.853 0.789 0.677 0.627 0.582 0.404 0.361 0.322 0.540 0.327 0.266 0.225 0.233 0.837 0.820 9 0.766 0.645 0.592 0.544 0.460 0.422 0.500 0.308 0.284 0.194 10 0.744 0.614 0.558 0.508 0.463 0.386 0.270 0.247 0.191 0.162 0.896 0.804 0.722 0.650 0.625 11 0.585 0.527 0.475 0.388 0.356 0.326 0.429 0.350 0.287 0.237 0.195 0.168 0.145 0.215 0.162 0.137 0.116 0.099 0.084 0.135 0.112 0.788 0.887 0.879 0.870 12 0.701 0.557 0.530 0.497 0.444 0.397 0.368 0.208 0.182 0.319 0.257 0.187 13 0.773 0.681 0.601 0.469 0.442 0.415 0.290 0.229 0.163 0.141 0.093 0.078 14 0.758 0.661 0.577 0.505 0.481 0.388 0.362 0.340 0.299 0.275 0.125 0.108 0.263 0.205 0.183 0.160 0.140 15 0.861 0.743 0.642 0.555 0.417 0.315 0.239 0.123 0.065 0.728 0.714 0.339 0.292 0.252 0.163 0.093 0.080 0.069 16 0.853 0.623 0.534 0.458 0.394 0218 0.198 0.123 0.108 0.107 0.093 0.071 0.060 0.054 0.605 0.587 17 0.513 0.317 0.231 0.844 0.836 0.436 0.371 0.270 0.146 0.045 18 0.700 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.081 0.051 0.038 O.coc. 0.304 O.000. 40. A7E O.200. n077 A404 A4CA A440 O.003 O.070 O043 Print Done

Answer 1

Answer 1
Year	Net Cash Inflow	PV Factor (I = 16%)	Present Value
1	262,000	0.862	225,844
2	255,000	0.743	189,465
3	222,000	0.641	142,302
4	211,000	0.552	116,472
5	201,000	0.476	95,676
6	173,000	0.410	70,930
Total Present value of cash inflow			840,689
Initial Investment			930,000
Net present value of the Project			(89,311)
Net Present Value (NPV) is Total present value inflow deducted by total present value Outflow
Answer 2
Particulars	Cash (Outflow)/Inflow	P V Factor (I = 16%)	Present Value
Refurbishment at the end of Year 6	(106,000)	0.410	(43,460)
Cash inflow in year 7	78,000	0.354	27,612
Residual value Year 7	54,000	0.354	19,116
Total Present value Inflow			46,728
Total Present value of Refurbishment outflow			43,460
Net Present value of the Refurbishment			3,268
Net Present value of the Refurbishment is Total present value of Refurbishment Inflow minus total present value of refurbishment outflow