archived_user
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- Dec 7, 2011
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Hi all,
Few questions on the capital budgeting practice problems in the CFA book. For the first question I am getting an NPV of roughly 6.7k which is obviously way out from the $97,449 the book is saying is the answer.
I have an outlay of -533k
after tax OCF of 146k for years 1-4
TNOCF of 124k for year 5
This is all in line with the solution, but my NPV is wrong? not sure what I doing wrong here?
Also for q2 could you help me understand the logic in just adding discounting the after tax dep’n to get the change in NPV? I assume this is because there has been no change in cash op revenus, cash op expenses or salvage value?
Few questions on the capital budgeting practice problems in the CFA book. For the first question I am getting an NPV of roughly 6.7k which is obviously way out from the $97,449 the book is saying is the answer.
I have an outlay of -533k
after tax OCF of 146k for years 1-4
TNOCF of 124k for year 5
This is all in line with the solution, but my NPV is wrong? not sure what I doing wrong here?
Also for q2 could you help me understand the logic in just adding discounting the after tax dep’n to get the change in NPV? I assume this is because there has been no change in cash op revenus, cash op expenses or salvage value?