NPV IRR Amortization basics

NPV IRR Amortization basics - $249,000.00 1 1141.25 1413.79...

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05/12/2009 Project Evaluation Basics NPV-net present value NPV-the present net value of future cash flows Decision: Select positive NPV projects, Reject (negative) NPV projects Rate 10% Use the company's cost of debt (capital)-includes the risk in the cash flows ($0.00) -100 10 10 10 10 110 IRR-The rate at which the present value of the future cash flows is zero Decision: Accept projects with an IRR over the hurdle rate IRR-Internal Rate of Return 10% Amortization table, investements, debt etc. Month Interest Payment Balance
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Unformatted text preview: $249,000.00 1 1141.25 1413.79 (272.54) 248727.46 2 1140.00 1413.79 (273.79) 248453.67 3 1138.75 1413.79 (275.04) 248178.63 4 1137.49 1413.79 (276.30) 247902.32 5 1136.22 1413.79 (277.57) 247624.75 6 1134.95 1413.79 (278.84) 247345.91 7 1133.67 1413.79 (280.12) 247065.79 8 1132.38 1413.79 (281.41) 246784.38 9 1131.10 1413.79 (282.69) 246501.69 10 1129.80 1413.79 (283.99) 246217.70 11 1128.50 1413.79 (285.29) 245932.40 12 1127.19 1413.79 (286.60) 245645.80 Change in Balance...
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This note was uploaded on 08/06/2008 for the course ESM 281 taught by Professor Cerf during the Spring '08 term at UCSB.

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