a) Calculate the net present value of the investment, which for the first three years...
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a) Calculate the net present value of the investment, which for the first three years brings a positive flow of PLN 2,600 at the end of each year, while the following year brings one flow of PLN 1,800 in mid-year (in the mid of 4th year). The investment amount is PLN 7,500 now. Assume an interest rate (cost of capital) of 8%. [Hint: 1.08^3.5=1.3091] (3 points) b) Please also provide the discounted payback period for this investment. (2 points) c) Comment the results obtained in a) and b) and the entire investment. (2 points) d) What amount of investment would give the same NPV as in a) if the investment would bring PLN 2,800 annually for 3 years (only). (3 points)
a) Calculate the net present value of the investment, which for the first three years brings a positive flow of PLN 2,600 at the end of each year, while the following year brings one flow of PLN 1,800 in mid-year (in the mid of 4th year). The investment amount is PLN 7,500 now. Assume an interest rate (cost of capital) of 8%. [Hint: 1.08^3.5=1.3091] (3 points)
b) Please also provide the discounted payback period for this investment. (2 points)
c) Comment the results obtained in a) and b) and the entire investment. (2 points)
d) What amount of investment would give the same NPV as in a) if the investment would bring PLN 2,800 annually for 3 years (only). (3 points)
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