Answer to Question #30864 in Economics of Enterprise for Faiz

Question #30864

An investment will have an initial outlay of Rs 100,000. It is expected
to generate cash inflows. Table 1.2 highlights the cash inflow for four
years.
Table 1.2: Cash inflow
Year Cash inflow
1
40000
2
50000
3 15000
4 30000
If the risk free rate and the risk premium is 10%,
a) Compute the NPV using the risk free rate
b) Compute NPV using risk-adjusted discount rate

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