Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

CFA Events Calendar

View full calendar

CFA Events Calendar

View full calendar

Recommended Discussions

See how our partners can help you ace your CFA exams.

Cash Flows for a Replacement Project

andynykandynyk L2 candidatePosts: 1 New Hire

From the example in p.35 of the CFA level II note,

TNOCF = SalT + NWCInv – T(SalT – BT)

= (200,000 – 100,000) + 80,000 – 0.30[(200,000 – 100,000) – (0 – 0)]

= $150,000

Why does it consider the SalT and BT of the old equipment? It should be sold and replaced by a new equipment at T=0.

Thanks.

Comments

Sign In or Register to comment.