Forums

Investment decision

Financial Management

Sir, I have a doubt. In computing the 'Base case PV' in the new Illustration 52 in the IFIN class, why is the present value of cash inflow computed as 'Annual cash inflow (₹42 lakh) ÷ discount rate (14%)'? The PVCI is ₹300 lakh.


Muhammed Salih

Muhammed Salih

CA Inter

17K+

12-Sep-24 01:19

250

Answers (1)

Because it is clearly mentioned in the question that 42L is indefinitely received.. hence CF/r gives the PV of indefinite cash flows


aditya yanamandra

aditya yanamandra

Faculty

12-Sep-24 11:48


CIN: U74999TG2017PTC116012 | GSTIN: 36AAECI4332C1Z0 | PAN: AAECI4332C

2024 IndigoLearn.com All Rights Reserved