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| Statement showing Cash flows | ||||
| Particulars | Time | PVf 6% | Amount | PV |
| Cash inflows | 1.00 | 0.9434 | 1,000.00 | 943.40 |
| Cash inflows | 2.00 | 0.8900 | 2,500.00 | 2,224.99 |
| Cash inflows | 3.00 | 0.8396 | 3,000.00 | 2,518.86 |
| Cash inflows | 4.00 | 0.7921 | 2,000.00 | 1,584.19 |
| PV of Cash flows | 7,271.43 | |||
| If discount rate falls below 6%,PVF would increase resulting in higher present value | ||||
| Q4 | ||||
| Ke = D1/P0 + g | ||||
| 12% = 3.15/53 + g | ||||
| 12% = 5.94% + g | ||||
| g = 6.06% | ||||
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