Skip to main content

Back to the full dot-point answer

SingaporeAccountingQuick questions

Investment Appraisal

Quick questions on Net present value explained: H2 Principles of Accounting

4short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.

What is discounting?
Show answer
The present value of a future cash flow is found by multiplying it by a discount factor:
What is q1?
Show answer
A cash inflow of \50\,000arisesinyear2;thediscountfactoris arises in year 2; the discount factor is 0.826$. Find its present value. [2 marks]
What is q2?
Show answer
Present value of inflows is \210\,000andtheoutlayis and the outlay is \200 000200\,000. State the NPV and the decision. [2 marks]
What is q3?
Show answer
Explain why NPV is preferred to the payback period. [3 marks]

Have a question we have not covered?

This dot-point answer is short enough that we have not extracted many short questions yet. Read the full dot-point answer or ask Mo, our study assistant, in the chat for follow ups.

All AccountingQ&A pages