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Example of Net Present Value Method
Cost of investment = 100,000/=,
Interest rate = 10percent,
Inflows year 1 = 80,000/=
Year 2 = 50,000/=
NPV = 80,000 / 1.1 + 50,000 / (1.1)2 - 100,000
= 14,049 positive hence invest.
Basic Finance, Finance
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