Chap 9 - Expected net cash flows Time Project A Project B...

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Expected net cash flows Time Project A Project B 0 ($10,000) ($10,000) 1 $5,400 $4,500 2 $3,400 $3,600 3 $4,500 $5,400 Project A Project B 0% Annual discount rate. 0% Annual discount rate. $3,300.00 Net present value of this investment $3,500.00 Net present value of this investment 5% Annual discount rate. 5% Annual discount rate. $2,114.03 Net present value of this investment $2,215.74 Net present value of this investment 10% Annual discount rate. 10% Annual discount rate. $1,099.92 Net present value of this investment $1,123.22 Net present value of this investment 15% Annual discount rate. 15% Annual discount rate. $225.36 Net present value of this investment $185.75 Net present value of this investment 20% Annual discount rate. 20% Annual discount rate. ($534.72) Net present value of this investment ($625.00) Net present value of this investment 25% Annual discount rate. 25% Annual discount rate. ($1,200.00) Net present value of this investment ($1,331.20) Net present value of this investment What is the crossover rate? Cash flow Time differential 0 $0 1 $900 2 ($200) 3 ($900)
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11.73% Answer
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Expected net cash flows Time Project A 0 ($28,000,000) 1 $51,968,000 2 ($9,686,520) 26% Annual discount rate. $7,143,083.90 Net present value of this investment What is the crossover rate? Cash flow Time differential 0 ($28,000,000) 1 $51,968,000 2 ($9,686,520) 64.58% Largest Smallest
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Expected net cash flows Time Project A Project B 0 ($324,527) ($30,908) 1 $28,900 $11,758 2 $54,000 $11,688 3 $50,000 $9,755 4 $401,000 $11,292 15.00% a $191,627 $7,462 3.48 2.76 Answer b ($275,847.95) ($162,882.95) $24,565.00 $45,900.00 $42,500.00 $340,850.00 c $3,584.06 $1,024.46 Answer d 15.37% 16.66% Answer e
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Net Cash Inflow 1 + growth rate 1 + Return 41000 36936.94 1.07 1.11 1.11 1 43870 35605.88 1.07 1.23 1.11 2 B 46940.9 34322.78 1.07 1.37 1.11 3 50226.76 33085.92 1.07 1.52 1.11 4 53742.64 31893.64 1.07 1.69 1.11 5 57504.62 30744.32 1.07 1.87 1.11 6 61529.94 29636.42 1.07 2.08 1.11 7 65837.04 28568.44 1.07 2.3 1.11 8 70445.63 27538.94 1.07 2.56 1.11 9 75376.83 26546.55 1.07 2.84 1.11 10 80653.21 25589.92 1.07 3.15 1.11 11 86298.93 24667.76 1.07 3.5 1.11 12 92339.86 23778.83 1.07 3.88 1.11 13 98803.65 22921.93 1.07 4.31 1.11 14 105719.9 22095.92 1.07 4.78 1.11 15 113120.29 21299.67 1.07 5.31 1.11 16 121038.71 20532.11 1.07 5.9 1.11 17 129511.42 19792.22 1.07 6.54 1.11 18 138577.22 19078.98 1.07 7.26 1.11 19 148277.63 18391.45 1.07 8.06 1.11 20 158657.06 17728.7 1.07 8.95 1.11 21 169763.06 17089.83 1.07 9.93 1.11 22 181646.47 16473.98 1.07 11.03 1.11 23 194361.72 15880.32 1.07 12.24 1.11 24 207967.05 15308.06 1.07 13.59 1.11 25 222524.74 14756.41 1.07 15.08 1.11 26 238101.47 14224.65 1.07 16.74 1.11 27 254768.57 13712.05 1.07 18.58 1.11 28 272602.37 13217.92 1.07 20.62 1.11 29 291684.54 12741.6 1.07 22.89 1.11 30 312102.46 12282.45 1.07 25.41 1.11 31 333949.63 11839.83 1.07 28.21 1.11 32 357326.1 11413.17 1.07 31.31 1.11 33
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382338.93 11001.89 1.07 34.75 1.11 34 409102.66 10605.42 1.07 38.57 1.11 35 437739.84 10223.25 1.07 42.82 1.11 36 468381.63 9854.84 1.07 47.53 1.11 37 501168.34 9499.71 1.07 52.76 1.11 38 536250.13 9157.38 1.07 58.56 1.11 39 573787.64 8827.38 1.07 65 1.11 40 613952.77 8509.28 1.07 72.15 1.11 41 656929.47 8202.64 1.07 80.09 1.11 42 702914.53 7907.05 1.07 88.9 1.11 43 752118.54 7622.11 1.07 98.68 1.11 44 804766.84 7347.44 1.07 109.53 1.11 45 861100.52 7082.67 1.07 121.58 1.11 46 921377.56 6827.44 1.07 134.95 1.11 47 985873.99 6581.4 1.07 149.8 1.11 48 1054885.17 6344.23 1.07 166.27 1.11 49 1128727.13 6115.61 1.07 184.56 1.11 50 1207738.03 5895.23 1.07 204.87 1.11 51 1292279.69 5682.79 1.07 227.4 1.11 52 1382739.27 5478 1.07 252.42 1.11 53 1479531.02 5280.6 1.07 280.18 1.11 54 1583098.19 5090.31 1.07 311 1.11 55 1693915.06 4906.87 1.07 345.21 1.11 56 1812489.12 4730.05 1.07 383.19 1.11 57 1939363.35 4559.6 1.07 425.34 1.11 58 2075118.79 4395.29 1.07 472.12 1.11 59 2220377.1 4236.9 1.07 524.06 1.11 60 2375803.5 4084.22 1.07 581.7 1.11
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