'Shareholders demand' presentation slideshows

NPV CRITERION FOR CAPITAL EXPENDITURE ANALYSIS

NPV CRITERION FOR CAPITAL EXPENDITURE ANALYSIS. Discount incremental after-tax cash flows at the cost of capital e.g., if initial investment = 100, cash flow in years 1 and 2 = 70, cost of capital = 10%, NPV = -100 + 70/(1.1) + 70/(1.1) 2 = 21.49 Since NPV > 0, project is worthwhile.

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