A company is considering an investment program with an initial cost of 200,000,000 which has a lifespan of 5 years. Below are data that will help calculate the net cash flows of the program. Due to the uncertainty in the market, cash flows are not certain. That is why the equivalence coefficients with certainty are also given. With a discount rate of 10%, calculate the Net Present Value of the Investment Program. 1. Cash inflows come from sales and amount to 150 million Euros in the 1st year, 150 million in the 2nd year, 200 million in the 3rd year, 250 million in the 4th year and 300 million in the 5th year. 2. The annual cash outflows are as follows: . i) Salaries amount to 2 million for the 1st year. From the 2nd year they increase by 1 million per year until the end of the 5th year. ii) At the end of the 3rd year the company will pay 4 million for the purchase of a fixed asset. iii) The cost of sales is estimated at 10% of annual sales. . iv) Other related expenses (payments) are estimated at 5 million per year. The equivalence coefficients with certainty are the following: Year Rates 1 0.95 2 0.90 3. 0.85 4 0.80 5 0.75

The nominal discount rate is 10%. Year 1 0.909 2 0.826 3 0.751 4 0.683 5 0.621