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A. Development Cost
Description Price
1 pc Stapler P 75.00 P
75.00
1 Monitor 80 watts
1 Printer 80 watts
1 pc Stapler P 75.00 P
78.75
1 Monitor 80 watts
1 Printer 80 watts
P = F / ( 1 + i )n
F = P / ( 1 + i )n
Where:
n = Number of years
Computation:
Year 1 Year 4
F = P * ( 1 + i )n F = P * ( 1 + i )n
= 12,458.51 ( 1 + 0.12 )1 = 12,458.51 ( 1 +
0.12 )1
= 12,458.51 ( 1.12) = 12,458.51 ( 1.57)
= 13,953.53 = 19,559.86
Year 1 Year 5
F = P * ( 1 + i )n F = P * ( 1 + i )n
= 12,458.51 ( 1 + 0.12 )1 = 12,458.51 ( 1 +
0.12 )1
= 12,458.51 ( 1.25) = 12,458.51 ( 1.76)
= 15,573.14 = 21,926.98
Year 3
F = P * ( 1 + i )n
= 12,458.51 ( 1 + 0.12 )1
= 12,458.51 ( 1.40)
= 17,441.91
= P 13,046.47
NET PRESENT VALUE – Under this method, all cash inflows or outflows related
to the Investment project are discounted at a minimum acceptable Rate of
return which in most cases, is the final cost of capital.
= P 28,031.65 – P 27,000
Summary: