Project P requires an investment of $4000$ at time $0$. The investment pays $2000$ at time $1$ and $4000$ at time $2$. Project Q requires an investment of X at time 2. The investment pays $2000$ at time $0$ and $4000$ at time $1$. The net present values of the $2$ projects are equal at an investment rate of $10$%. Calculate X.
$4000+\frac{2000}{1.10}+\frac{4000}{1.10^2}=2000+\frac{4000}{1.10}+\frac{X}{1.10^2}$
$\therefore X=4220$
But the answer is $5460$
Be careful of whether you have to invest or whether you are paid.
Solve for $x$:
$$-4000+\frac{2000}{1.1}+\frac{4000}{1.1^2}=2000+\frac{4000}{1.1}-\frac{x}{1.1^2}$$