I keep getting the wrong answer for the DPP and i can not work out what i am doing wrong, the solution says the answer is 11 years and 9 months but when i calculate the NPV at this time it is clearly :
- (200 + 600a_(0.5)^(12) + 15(v^(1/2))a_(11+(3/12))^(12)) + 96(v^(1/2))(adue_(11+3/12)^(12))
= - (200 + 290.283 + 89.6922) + 579.480833
= -0.4944 ????????
The only way i can see this is possible is if you include the rental payment due at the start of the month at time t=11+(9/12) but can you actually do this
Last edited by a moderator: Sep 10, 2009