Help!!!! needed for portfolio!!!!!!!!!
System
Posts: 100,534 🤖 Admin 🤖
Hi can anyone work this out for me:
a business is considering whether to invest in a project to buy a new machine. the machine will cost £55,000 and will have a life of 3 years. the estimated cash flows from the machine are yr one £18,000, year 2, £29,000 and year three £31,000
the business uses a post tax cost of capital of 8% to appraise all projects of this kind:
calculate the net present value of the proposal to purchase this machine using the following discount factors:
yr one - 0.93
yr two - 0.86
yr three - 0.79
a business is considering whether to invest in a project to buy a new machine. the machine will cost £55,000 and will have a life of 3 years. the estimated cash flows from the machine are yr one £18,000, year 2, £29,000 and year three £31,000
the business uses a post tax cost of capital of 8% to appraise all projects of this kind:
calculate the net present value of the proposal to purchase this machine using the following discount factors:
yr one - 0.93
yr two - 0.86
yr three - 0.79
0
Comments
-
Re:Help!!!! needed for portfolio!!!!!!!!!
Multiply the cash flows for the year by the discount factor for that year. Add 'em up and subtract the invested sum and you have the NPV.
I'll let you do the sums
Chris0 -
Re:Help!!!! needed for portfolio!!!!!!!!!
to work out the NPV you less the discounted cash flows from the capital expenditure. the discounted cash flows are the figures you get when you mutilpy what CJC said.0