MyFinanceLab Ch. 11

MyFinanceLab Ch. 11 - • MIRR o Calculate PV of negative...

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MyFinanceLab: Ch. 11 NPV: o =NPV (discount rate, cash inflows) + cash outflow (should be negative) Equivalent Annual Cost: o First calculate NPV: Same as normal Leave out initial inflow (then add in like normal) o Then, PMT (disc., nper, NPV, FV=0) Gives you EAC o Select project w/ lowest EAC IRR: o =IRR (all cash flows, guess: .1) o How to figure out cash outlay at year 0: =NPV (IRR, cash inflows)
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Unformatted text preview: • MIRR: o Calculate PV of negative cash flows o Add them to initial outlay o =PV (disc. Rate, nper, neg. #=FV) o Then calculate IRR • Discounted payback: o Calculate PV of each cash inflow =PV (disc. Rate, nper,,-FV) o Sum them up to find payback • Profitability index: o Calculate NPV of all cash inflows at discount rate o Divide by initial cash outflow...
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This note was uploaded on 06/11/2011 for the course BUSI 408 taught by Professor Croce during the Spring '08 term at UNC.

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MyFinanceLab Ch. 11 - • MIRR o Calculate PV of negative...

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