Level 4 - Standard Costing Direct Costs

shamilkaria · October 25

Hi @LouboutinLou1

The Present value is worked out by multiplying the Net Cashflow by discount factor
Year 0 : -1,900 x 1.000 = -1,900
Year 1 : -1,900 x 0.909 = -1,727 (rounded)
Year 2 : -4,650 x 0.826 = -3,841 (rounded)
Year 3 : 2,250 x 0.751 = 1,690 (rounded)
Year 4 : 4,200 x 0.683 = 2,869 (rounded)
Year 5 : 3,500 x 0.621 = 2,174 (rounded)

The totals just add everything up

shamilkaria · October 25

Hi @LouboutinLou1

I hope this has helped you, sorry it's not in great detail it's just because I'm using my phone to answer the question makes it a bit harder to write in detail. However I hope this has helped and hopefully it should support you in answering other questions.

Kind regards

Shamil

LouboutinLou1 · October 26

Good morning,

Thank you so much for this it really is appreciated. It makes perfect sense when its broken down this way

shamilkaria · October 26

Hi @LouboutinLou1

No worries you are most welcome. Glad it has helped you out 🙂.

Kind regards

Shamil

Level 4 - Standard Costing Direct Costs

Comments

Categories