DECEMBER 2008 question 2.3
lala2009
Feels At HomeRegistered Posts: 95
Ok I have read the chief assessor's report for this exam and I must admit I have no idea how to answer this question  "unforgivable"!!!
I have looked at the model answer but still struggling  is anyone able to give me a step by step answer pleeeeaase?
:crying:
I have looked at the model answer but still struggling  is anyone able to give me a step by step answer pleeeeaase?
:crying:
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Comments

are u talking about pev? pcr/ or dfs???0

Ahhhh sorry PEV!0

I think this is a life cycle costing question
If so: Find the net cash flow each year
 Find the appropriate PV (or discount) factor for each year
 Multiply the net cash flow and the PV factor on a year by year basis to produce the discounted cash flowfor each year
 Add up all the discounted cash flows to find the net present value
 If the net present value is positive that means the decision to go ahead with the project will add value to the business (as soon as the decision is made).
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Thank you!0