A good video.
I have recommended students to look at this, but I dispute the savings calculation.
The savings only apply to years 3 to 10 (inclusive). At £1,000,000 and a discount factor of 6% the discounted total value is £5,526,694.
I think you left the second year in your calculation giving you years 2 to 10 for the £6.375 millions (or without rounding £6,416,690)
I have recalculated the net present value as -£140,000 making this project not a viable investment.
PJEAChichester 2 months ago
A good video.
I have recommended students to look at this, but I dispute the savings calculation.
The savings only apply to years 3 to 10 (inclusive). At £1,000,000 and a discount factor of 6% the discounted total value is £5,526,694.
I think you left the second year in your calculation giving you years 2 to 10 for the £6.375 millions (or without rounding £6,416,690)
I have recalculated the net present value as -£140,000 making this project not a viable investment.
PJEAChichester 2 months ago