In: Finance
Calculate the Net Present Value of the cash flows depicted in the table below using a cost of capital of {r81d}percent.
year | Cash Flow |
---|---|
0 | -60 |
1 | 40 |
2 | 40 |
3 | 0 |
Statement showing Cash flows | ||||
Particulars | Time | PVf 8% | Amount | PV |
Cash Outflows | - | 1.00 | (60.00) | (60.00) |
PV of Cash outflows = PVCO | (60.00) | |||
Cash inflows | 1.00 | 0.9259 | 40.00 | 37.04 |
Cash inflows | 2.00 | 0.8573 | 40.00 | 34.29 |
Cash inflows | 3.00 | 0.7938 | - | - |
PV of Cash Inflows =PVCI | 71.33 | |||
NPV= PVCI - PVCO | 11.33 |