Answer -1 | ||||
year | Description | Cash Flows | CV Factor at 18% | |
0 | Intial cost of Equipment & Working Capital | $ -5,73,000 | 1 | $ -5,73,000 |
1 to 9 years | Cash Outflow Savings | $ 1,17,000 | 4.303021 | $ 5,03,453 |
9 | Working capital and residual value | $ 60,000 | 0.225456 | $ 13,527 |
NPV | $ -56,019 | |||
Net present value of the Project | $ -56,019 |
Answer- 2 | ||
Option is D $7,558 is correct | ||
Present value of annual cost savings |
53074 | 14000*3.791 |
Present value of salvage value | 2484 | 4000*0.621 |
Total present value | 55558 | |
Less: Investment cost | 48000 | |
Net present value | 7558 | |
Option is D $7,558 is correct | ||
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