Kikoe
February 12, 2020, 7:30pm
#1
Hi ,

I´m getting a wrong result from my calculation of this NPV = 125000 + 47000/ (1.1)4 + 20.000 /(1.1)4 = 37644

CFO = - 125000 ; C01 = 47000 ; SAVAGE VALUE = 20000; T = 4, I= 10

In my BAII I´m putting

CF0 = -125.000 ; C01 = 47000 ; F01 = 4 ; C02 = 20000 ;F02=1 ; I= 10 .

And the NPV I get is = 36402 .

Can anybody tell me what I´m doing wrog?

Try C01=47000 F01 =3 and C02=67000 F02=1. This assumes 4 years of 47000 and a salvage value of 20,000 at the end of year 4.

ETA: the NPV formula is -125,000 + 47,000 * [1-(1+i)^{-4} ]/i +20,000/(1+i)^{4}

Kikoe
February 17, 2020, 8:06pm
#4
Hi ,

I have another related doubt, but in this case with the calculation of the NPV for a project with different ATOCF.

The project has a ATOCF of 0,31 from years 1 to 6 , and of 0,21 from year 7 to 12.

The Terminal year non operating CF is 0,7 .

NPV = −1.90+ [∑t=1- 6] 0.31 / 1.12t+ [∑t=7-12] 0.21/1.12t+ 0.70/ 1.1212

I have problems solving the PV of the last part of the project, from year 7 . I think i should do :

C01 = 0,21, F01= 4 ( FROM 7 TO 11) , r= 12% and it give me 0,6378 and no 0,4374 ?

The solution they give is :

NPV = –1.90 + 1.2745 + 0.4374 + 0.1797

Try 6 payments of 0.21. c0=0 c01=0 f01=6 c02=0.21 f02=6 npv 12% CPT 0.43742

Kikoe
February 18, 2020, 6:10pm
#6
That´s it !! but I don´t get why do you give a value of 0 to the first CF (C01) with a frecuency of 6 times?

and the calculation to the last part , that gives 0,1797 ??

I was valuing the CFs of 0.21 at times 7 through 12 as of time 0. I was trying to duplicate the approach in the solution: it’s calculating PV by section rather than just laying it all out in a single time line.

0.7/(1.12^{12} ) = 0.179673