Introduction Of Banking And Finance
Part A
In order to calculate the project's Net Present Value (NPV), we must discount future cash flows back to their present value using the company's 15% cost of capital (hurdle rate).
NPV = Σ [Cash Flow / (1 + Cost of Capital) ^Year]
NPV = (-£30,000,000 / (1 + 0.15) ^0) + (£8,000,000 / (1 + 0.15) ^1) + ... + (&poun...
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