Why cash inflow at 0 year in calculation of npv at two discount rate is shown as negative in brackets although this is an inflow for company?
CA Suraj Lakhotia Admin
You can consider and calculate inflow. Answer would be same
But if we consider it as inflow npv by lower discount rate would be negative and npv by higher rate would be positive
Thread StarterAtharv Sankliya
Sir answer is same the only difference is npv by lower rate is negative So my question is does this npv by lower rate is negative because if cost of debt is 10% the company is paying more to investor as per discount rate of 10 %
As interest rate increases, present value decreases and vice versa. Interest rate lower means PV of outflow is higher.