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
Silly me …Thanks!!!
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 
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/(1.1212) = 0.179673