week_3_assign_2 - at 5% Project A Project B Project C Cash...

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Unformatted text preview: at 5% Project A Project B Project C Cash Flows ash Flows ash Flows C C Year 0 1 2 3 4 NPV IRR MIRR Payback Period Acceptance? at 10% -1000 -1000 -1000 200 500 350 300 400 350 400 300 350 500 200 350 $219.47 $262.69 $241.08 <===== 12.8% 17.8% 15.0% <===== 10.3% 11.3% 10.8% <===== 3.2 2.33 2.86 <===== 3000 1000 2000 <===== Project A Project B Project C Cash Flows ash Flows ash Flows C C Year 0 1 2 3 4 NPV IRR MIRR Payback Period Acceptance? at 12% -1000 -1000 -1000 200 500 350 300 400 350 400 300 350 500 200 350 $71.78 $147.12 $109.45 12.8% 17.8% 15.0% 11.9% 13.8% 12.9% 3.2 2.33 2.86 3000 1000 2000 Project A Project B Project C Cash Flows ash Flows ash Flows C C Year 0 1 2 3 4 NPV IRR MIRR Payback Period Acceptance? -1000 -1000 200 500 300 400 400 300 500 200 $20.20 $105.94 12.8% 17.8% 12.6% 14.9% 3.2 2.33 3000 1000 -1000 350 350 350 350 $63.07 15.0% 13.7% 2.86 2000 the npv formula starts in year 1, not year zero, so you also, npv formula has to be in decmcals, so 5% is 0.05 there is an excel function for this this you can calc in your head, just look at the cashflow here I am answering 'how much budget would I need b the capital budget part is asking, "if you only have 1000 so with 3000 you do all 3, with 2000 you do the 2 with in year 1, not year zero, so you have to add the year 0 investment seperately to be in decmcals, so 5% is 0.05, not 5 ion for this ur head, just look at the cashflows and figure out how many years till you recoup the 1000 investment ow much budget would I need before I would do this project?' is asking, "if you only have 1000 to invest, which would you choose? If you only have 2000 to invest, which would you choose, ll 3, with 2000 you do the 2 with the highest NPVs, with 1000 you do only the one with the highest npv st, which would you choose, if you have 3000, which will you choose) ...
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