NBAA CPA Intermediate

Practice session

A company in Tanzania is evaluating an investment project with a cost of TZS 200 million. The project is expected to generate nominal cash flows of TZS 80 million in year 1, TZS 100 million in year 2, and TZS 90 million in year 3. The general inflation rate is 5% per annum, and the company's real cost of capital is 8%. What is the Net Present Value (NPV) of this project in nominal terms?

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