| Chart Values are Based on: | ||||||
| n= 7 | ||||||
| i= 12% | ||||||
| Cash flow | Select chart | Amount | X | PV Factor | = | Present Value |
| Annual cash flow | Present Value of an Annuity of 1 | 11200 | X | 4.5638 | = | 51115 |
| Residual value | Present Value of 1 | 6000 | X | 0.4523 | = | 2714 |
| Present value of cash inflows | 53828 | |||||
| Immediate cash outflows | 47000 | |||||
| Net present value | 6828 | |||||
| Workings: | ||||||
| PV Factor | ||||||
| Present Value of an Annuity of 1 | =(1-(1.12)^-7)/0.12 | |||||
| Present Value of 1 | =1/1.12^7 |
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