Year | Cashflow | PVF @ 15% | PV |
0 | -1,500,000.00 | 1.0000 | -1,500,000.00 |
1 | 350,000.00 | 0.8696 | 304,347.83 |
2 | 450,000.00 | 0.7561 | 340,264.65 |
3 | 630,000.00 | 0.6575 | 414,235.23 |
NPV | -441,152.30 |
Therefore option D is correct.
Question 18:
Monthly payment to buy the truck = $878
No of monthly payments to be made (N) = 60
Payment to be made if Truck if bought from dealer, that is present value of truck (PV) = (-$35,620)
Therefore monthly interest rate of monthly payment scheme = ?
Using financial calculator or RATE function in excel,
Monthly interest rate of monthly payment scheme = 1.385% p.m equivalent to 16.6% p.a.
Therefore option D is correct.
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