Answers
rate positively ..
ans a) | computation of NPV | ||||
Year | Cash flow | PVIF @ 7.1% | present value | ||
0 | -540 | 1.0000 | (540) | ||
1 | 87 | 0.9337 | 81 | ||
2 | 87 | 0.8718 | 76 | ||
3 | 87 | 0.8140 | 71 | ||
4 | 87 | 0.7600 | 66 | ||
(246) | |||||
therefore answer = | (246) | ||||
ans b) | "no" | ||||
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