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Excercise 4 A British multinational anticipates cash flows of 100 mln GBP, 120 mln GBP and 160 mln GBP, respectively, for the
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Answer #1
NPV
Year Cash flow(in GBP) PV @ 17% Disc. Cash flows(in GBP)
1 100 0.8547 85.47
2 120 0.7305 87.66
3 160 0.6244 99.904
4 200 0.5337 106.74
5 360 0.4561 164.196
Total cash inflows = 543.97
Initial outflow = 790
NPV = -246.03
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