Problem 2. Tipan’s Company is planning to invest Php 40,000 in a 3-year project. Tipan’s expected rate of return is 10%. The present value of P1 at 10% for 1 year is .909, for 2 years is .826 and for 3 years is .751. The cash flow net of income taxes will be Php 15,000 for the 1st year (PV of Php 13,635) and Php 18,000 for the 2nd year (PV of Php 14,868).   Question: Assuming the rate is exactly 10%, what would the cash flow, net of income taxes be for the 3rd year?

Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter19: Capital Investment
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Problem 2. Tipan’s Company is planning to invest Php 40,000 in a 3-year project. Tipan’s expected rate of return is 10%. The present value of P1 at 10% for 1 year is .909, for 2 years is .826 and for 3 years is .751. The cash flow net of income taxes will be Php 15,000 for the 1st year (PV of Php 13,635) and Php 18,000 for the 2nd year (PV of Php 14,868).

 

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Assuming the rate is exactly 10%, what would the cash flow, net of income taxes be for the 3rd year?

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