TABLE 11.2A Present Value of $1 0.9804 0.9612 0.9423 0.9238 0.9057 0.8880 0.8706
ID: 2532796 • Letter: T
Question
TABLE 11.2A Present Value of $1 0.9804 0.9612 0.9423 0.9238 0.9057 0.8880 0.8706 0.8535 0.8368 0.8203 0.6730 0.9639 0.9290 0.9592 0.9201 0.8826 0.9346 0.8734 0.9259 0.8573 0.7938 0.7350 0.9524 0.9426 0.8900 0.8396 0.7921 0.7473 2 0.9246 0.8638 0.8227 0.7835 0.7462 0.7107 0.6768 0.8885 0.8626 0.8375 0.8631 0.8548 0.8219 0.7903 0.7599 0.7307 0.7026 0.6756 0.4564 4 0.7629 0.8121 0.7790 0.7473 0.7168 0.6302 0.5835 0.5403 0.5002 0.4632 0.7728 0.7449 0.6227 0.5820 0.7894 0.6274 0.5919 0.7441 0.5537 0.6920 0.4789 0.6595 0.4350 20 0.3769 0.3118 20% 0.8696 0.7561 0.6575 0.5718 0.4972 0.4323 0.3759 0.3269 0.2843 0.2472 0.9009 0.8116 0.8929 0.7972 0.8333 0.6944 0.5787 0.4823 0.4019 0.3349 0.9091 0.8850 0.7831 0.6931 0.6133 2 0.8417 0.7695 0.7084 0.6499 0.4096 0.3277 0.2621 0.2097 0.6830 0.6355 0.6587 0.5935 0.5346 0.4817 04339 0.3909 0.3522 0.5921 0.4803 0.4556 0.3996 0.3506 0.3075 0.2697 0.5645 0.4523 0.4665 0.4241 0.3855 0.1486 0.5019 0.2326 0.1342 0.3220 0.1037 0.4224 0.2946 20 0.0261Explanation / Answer
Net Present Value of this project is $11,271
Workings
Net present value (NPV) = Present Vale of cash flows – Initial Investment
= [ $82,000 x (PVAF 15%,9 Years) ] - $3,80,000
= [ $82,000 x 4.7716 ] – $3,80,000
= $3,91,271 - $3,80,000
= $11,271