At the beginning of the year, Shaolin Company had total assets of $520,000 and total liabilities of $210,000. Answer the followi
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Answer:
The APV of a project will be "$88,958.52".
Explanation:
To calculate the APV (Adjusted Present Value):
NPV of a Equity Financing =
On putting the values in the above formula, we get
=
=
= $
Present value:
When $320000 is funded with department to be reimbursed in two installments of I, we provide
⇒ $320000 =
⇒ = $
During first year of a installment,
[320000×0.10] = $32000 is of concern interest as well as the remaining
$152380.95 ($184380.95-$32000) seems to be of principal repayment which leaves $167619.05 ($320000-$152380.95) as a debt for the next year.
Now,
APV =
On putting the values in the above formula, we get
⇒ =
⇒ = $