# ECR June 2009 Answers

jewels.p
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**1,774**Registered
I am trying to master Discounted Cash Flows and N.P.V at the moment. (Quiet at work this week so trying to study a lot). I had a look at June's question on this to see if it helped me any. The N.P.V for Year 0 is £39.72 I don't understand this at all!

How do you calculate Year 0?

Thanks

How do you calculate Year 0?

Thanks

## Comments

6,970Registeredi think i remember this did you add on the £50 inputted capital ?

1,774Registered(Above figures are in £000)

454RegisteredI couldn't see any model answers but yours look all correct to me (Yr 0 Being 400 * 1.000), other than Yr 3.

For Yr 3 I would have included the disposal proceeds of 50, as it is an incremental cash flow relevant to the investment - that would make the Net Cash flow 200 * 0.675 = 135.

Hope this helps

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1,774RegisteredJulie