Sands600461
Mar 23, 2009, 10:33 AM
How do i calculate the NPV of a company project
Sands600461 Mar 23, 2009, 10:33 AM How do i calculate the NPV of a company project ROLCAM Mar 24, 2009, 03:49 AM by matching the outflow at the beginning with all the returns discounted to the present. An interest rate has to be assumed. Example:- Purchase of Equipment = 20,000 Returns over the next five years. Year 1 5,000 Year 2 5,000 Year 3 5,000 Year 4 5,000 Year 5 5,000 You calculate the present value of the above 5 lots of 5,000, say at 10% Cost of Capital. You total the 5 calculations and subtract the original 20,000. This is a technique in Capital Budgeting decisions as to the choice of alternative capital investments. Copyright ©2005-, Ask Me Help Desk
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