3 Question 1 Windsor Ltd is considering a project, which will involve the following cash inflows and (out) flows: Year 0

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3 Question 1 Windsor Ltd Is Considering A Project Which Will Involve The Following Cash Inflows And Out Flows Year 0 1 (32.05 KiB) Viewed 65 times

3 Question 1 Windsor Ltd is considering a project, which will involve the following cash inflows and (out) flows: Year 0 Cash flow -400,000 40,000 300,000 300,000 If the cost of borrowing is 15% per annum what is the net present value of the project? 2 1 Guide: The NPV = PV (Inflows) - PV (Outflows or Cost) We accept "deals" where the NPV > 0, and We reject deals where the NPV < 0. Get NPV = -10 + 2h (1+K) NPV = NET PRESENT VALUE 10 = INITIAL OUTLAY K= COST OF CAPITAL or requirement rate of return N= number of years