Net Present Value
- Created by: Danni Algate
- Created on: 02-06-13 11:37
View mindmap
- NET PRESENT VALUE
- Step One
- Multiply each years cash inflow by each years discount factor
- e.g year 1 cash inflow = 4M
- Multiply each years cash inflow by each years discount factor
- Step Two
- Add all years present value
- Step Three
- INITIAL INVESTMENT- TOTAL PRESENT VALUE
- = NET PRESENT VALUE
- INITIAL INVESTMENT- TOTAL PRESENT VALUE
- Step One
- e.g year 1 cash inflow = 4M
- Year 1 discount factor = 0.909
- 4M x 0.909 = 3636000
Comments
No comments have yet been made