Example of net present value method, Finance Basics

Example of Net Present Value Method

Cost of investment = 100,000/=,

Interest rate = 10percent,

Inflows year 1 = 80,000/=

Year 2 = 50,000/=

NPV   = 80,000 / 1.1 + 50,000 / (1.1)2 - 100,000

          = 14,049 positive hence invest.

Posted Date: 1/31/2013 12:44:08 AM | Location : United States

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