BA303 CORPORATE FINANCE

TUTORIAL 5A

ST2

BA303 CORPORATE FINANCE

TUTORIAL 5A
ANSWER
a) Nguyen Inc

Commercial Hydronics

1. Maplewood Creations

BA303 CORPORATE FINANCE

TUTORIAL 5A

Indexx,
Yes, NPV = $161,296
ANS: B
Solution:
NCF1 = (400,000 - 250,000 - 136,653)(.6) + 136,653 = $144,661
NCF2 = (460,000 - 275,000 - 182,245)(.6) + 182,245 = $183,898
NCF3 = (529,000 - 302,500 - 60, 721)(.6) + 60,721 = $160,188
NCF4 = (608,350 - 332,750 - 30, 381)(.6) + 30,381 = $177,512
NCF5 = (699,603 - 366,025)(.6) = $200,147
NPV = -$410,000 + $144,661(0.870) + $183,898(0.756)
+ $160,188(0.658) + $177,512(0.572) + $200,147(0.497)
= $161,296

BA303 CORPORATE FINANCE

TUTORIAL 5A
Imperial system