Ganeshan Limited is evaluating a project that has the following cash flow stream associated with it: Year 0 1 2 3 4 5 6 Cash Flow (INR) -120 -80 20 60 80 100 120 The cost of capital is 15 percent. Calculate the terminal
CS Executive · Corporate Accounting and Financial Management · PYQS · December 2025
Ganeshan Limited is evaluating a project that has the following cash flow stream associated with it: Year 0 1 2 3 4 5 6 Cash Flow (INR) -120 -80 20 60 80 100 120 The cost of capital is 15 percent. Calculate the terminal value of cash inflow of the company.
Answer & Explanation:
The terminal value of cash inflow is: ₹ 20(1.15)^4 + ₹ 60(1.15)^3 + ₹ 80(1.15)^2 + ₹ 100(1.15) + 120 = ₹ 34.98 + ₹ 91.25 + ₹ 105.80 + ₹ 115 + ₹ 120 = ₹ 467.03
Topics: Financial Management
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