Question
A new financial analyst at Company X does the following NPV analysis. Year After-tax Cash flows PV @ 12% 0 -100000 -100,000.00 1 30000 26,978.42
A new financial analyst at Company X does the following NPV analysis.
| Year | After-tax Cash flows | PV @ 12% |
| 0 | -100000 | -100,000.00 |
| 1 | 30000 | 26,978.42 |
| 2 | 30000 | 24,261.17 |
| 3 | 35000 | 25,453.86 |
| 4 | 35000 | 22,890.16 |
| 5 | 35000 | 20,584.68 |
| 6 | 35000 | 18,511.40 |
He reports an NPV of $38,679.69, an IRR of 10.93% and a payback period of 5.02 years.
Check these results and correct his analysis if necessary.
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Information Technology For Managers
Authors: George Reynolds
2nd Edition
1305482492, 1305389832, 9781305482494, 978-1305389830
