Why did we take 0 cash flows for a period of 19 months and not 20 months? Can someone please elaborate on that bit?
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This sum consists of 5*12 = 60 periods.
You have to deposit 100 for 3years and 4 months i.e. for 40 periods. They will pay you 6000 at the end of the 5th year i.e. on the 60th period.
So actually you are not getting any cash flow for 19 periods(59 – 40).
So, C01 = -100 F01 = 40
C02 = 0 F02 = 19
C03 = 6000 F03 = 1
I = 12 / 12 = 1%
CPT = NPV = 19.2291. Option C.