is 0.641. What is the 16% is 0.862; for two years is 0.743; for three years ‘The PV of P 1 for one year at Company's cost of capital is 16%. courte (PV) payback period? 23 years 7year 27 years 2years =e a capitalnvestment ignores the time value of money? ‘ +h ec ome at tal nese esti Fovted IRR NPV Balloo ©) ARR ( received inthe future because of 30 now is worth more than a peso to be = (The opportunity cost of waiting en ete cera ‘Net presente (NPV) is 2 Thesumof discounted cash flows The sum of discounted cash outiows © renmoldanecdcoh niles te anole dunte.cah tne Thesumat discounted cash inflows plu dscounted cash outfows * Which capital bugeting method assumes thatthe funds are reinvested at th Payback Accounting rate of return 3 company’s cost of apa? fe Netpresent value Time adhe rate fret ow have been consulted to advice Polangui Corp. on the projected acquisition of another Production line costing 1 million. The line has an ut any sahage value. The followi ing ational information was made availble Year Estimated Annual Cash Infow Present Value of P1 : tn 000 oa buy 2 300, 000 076 —— 3 200, 000 0.63 (ae 4 200, 000 O53 1067 5 200,000 as Tora, # %, 500,000 327 ‘ssuring that the cath fow's tobe discounted your avec ¢ 2. Toinvertauetonet present val of Sal aen . % Teinvese to net present value of P34, 0on = © ‘To vest due to net advantage of P $00, 000 a _ SToloestcuetonet preset ale of 635,000 © Teongetna te othe ah nn tatare uno, elerence wt bemadeto table that shows 8 evetrs Present value of annuity of P Future value of annuity of P 1 on the staightine bass szivege value. The machine oe hee Sahn bas Ot etna ul eo sen 'S expected to generate cash flows rations, net of income eee “Setorcecraeoteumis i wfomaton copes eee See: "00a Sf eent lu of Pa 12% for sever periods 1459 € b Present value of an ordinary annuity of Py it 12% for sever co. : Assuming a, ia aahaaahe Ty fegg moat rn wht ey est py ats erase P37, 840