If a company wants to invest in a project, it needs to invest 100000 yuan, and the project period is six years. It is estimated that after the investment, the company will make profits from the second

If a company wants to invest in a project, it needs to invest 100000 yuan, and the project period is six years. It is estimated that after the investment, the company will make profits from the second year after the investment, and it can make profits for five consecutive years. I think there are two ways to calculate. One is the final value and the other is the present value.

Method 1: the final compound interest value: Fv (6) = PV * fvif (12%, 6) =100000 *1.974 =197400.

Final investment value: FVA (5) = A * FVIFA (12%, 5) = 24000 * 6.353 = 152472.

It can be concluded that this project is uneconomical.

Method 2: Present value of annual profit deferred annuity:

V=A*PVIFA( 12%，5)*PVIF( 12%， 1)= 77262.32 & lt； 100000

So the project is not cost-effective.