UK NPV With Profit Margin Consideration


Joined
Jan 19, 2014
Messages
3
Reaction score
0
Hi All,

I've got a task of calculating a companies NVP while taking into consideration a profit margin. I have done NPV calculations before but never had to account for a profit margin.

The question is set out as thus :

A firm will invest £100,000 in Year 0
Calculate NPV at the end of Year 4, Using a Discount Rate of 10% and Profit Margin of 25%
Sales revenue each year are £176,848.
Do not attempt to account for tax.

Can anyone point me in the right direction of how to incorporate the profit margin into the calculation? Many thanks in advance for any guidance.
 
Ad

Advertisements

Triest123

VIP Member
Joined
Feb 12, 2012
Messages
269
Reaction score
50
Hi All,

I've got a task of calculating a companies NVP while taking into consideration a profit margin. I have done NPV calculations before but never had to account for a profit margin.

The question is set out as thus :

A firm will invest £100,000 in Year 0
Calculate NPV at the end of Year 4, Using a Discount Rate of 10% and Profit Margin of 25%
Sales revenue each year are £176,848.
Do not attempt to account for tax.

Can anyone point me in the right direction of how to incorporate the profit margin into the calculation? Many thanks in advance for any guidance.
=> with such limited information provided, you can view the profit as the "NET" cash inflow
annually from the investment.
 
Joined
Jan 19, 2014
Messages
3
Reaction score
0
=> with such limited information provided, you can view the profit as the "NET" cash inflow
annually from the investment.
Sorry for the lack of information, its all i've actually been given. So are you saying that I should calculate the NVP for 75% for each of the yearly inflows?
 
Ad

Advertisements


Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

Profit Margin 1
Profit margins 4
profit margin 3
profit margins 2
Profit Margins 0
Profit Margin 1
inconsitant profit margin 4
Report Profit Margin 5

Top