K
kika258
Member
September 2005 Q11
Can anyone please explain why for the costs of staff he used v^3 + 1.05v^4... and not v^2+1.05v^3.. aren't the costs incurred at the BEGINNING of each year? It says that they will be incurred at the beginning of each year starting in 3 years time.. so isn't the first payment sort of at the end of year 2? i.e it should be discounted by v^2 and not v^3.
Thanks!
Can anyone please explain why for the costs of staff he used v^3 + 1.05v^4... and not v^2+1.05v^3.. aren't the costs incurred at the BEGINNING of each year? It says that they will be incurred at the beginning of each year starting in 3 years time.. so isn't the first payment sort of at the end of year 2? i.e it should be discounted by v^2 and not v^3.
Thanks!