Answer :
Loss of 8039
Explanation :
n | CF | PVIF | PVIF | discounted cash flow |
---|---|---|---|---|
0 | -100000 | |||
1 | 40,000 | [1/(1+0.10)^1] | 0.9091 | 36,364 |
2 | 40,000 | [1/(1+0.10)^2] | 0.8264 | 33,056 |
3 | 30,000 | [1/(1+0.10)^3] | 0.7513 | 22, 539 |
So, projet balance in year 3= Initial investment - discounted cash flow in 3 years.
=1,00,000-36,364-33,056-22,539
=-8041.
Note: because of roundup there is 2 dollar difference.
Find the project balance in year 3 at i=10% n Cash flow 0 - 100000 1...
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