Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Years Inflows Outflows Net Flow Discount Factor NPV 0 500,000 (500,000) 1.00 (500,000) 1 50,000 50,000 0.81 40,500 2 250,000 250,000 0.66 165,000 3 350,000
| Years | Inflows | Outflows | Net Flow | Discount Factor | NPV |
| 0 | 500,000 | (500,000) | 1.00 | (500,000) | |
| 1 | 50,000 | 50,000 | 0.81 | 40,500 | |
| 2 | 250,000 | 250,000 | 0.66 | 165,000 | |
| 3 | 350,000 | 350,000 | 0.54 | 189,000 | |
| (105,500) or (106,020) in excel |
Required rate of return 20%
Inflation rate 3%
Can you tell me how they figured out the discount factor in this table?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cima Official Exam Practice Kit Fundamentals Of Management Accounting Cima Certificate In Business Accounting 2006 Syllabus
Authors: Walter Allan
2nd Edition
0750687177, 978-0750687171
