Ch_09_Inclass_Exercises_Solutions

# Ch_09_Inclass_Exercises_Solutions - Period Cashflow...

This preview shows pages 1–2. Sign up to view the full content.

1 Ch 09 Inclass Exercises Solutions 1. Calculate Payback manually Project Cash Flows 0 -100,000 -100,000 1 32,000 -68,000 2 55,000 -13,000 3 45,000 32,000 Payback = 2 + 13,000 / 45,000 = 2.29 2. A project has an NPV of \$ 5,250 and an initial investment of \$ 30,750. Calculate the Profitability Index manually. PI = 5250/30750 = 1.17 3. Calculate Payback, NPV, IRR, and PI. (2.66, -10,030, 7.3%, 0.95)

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Period Cashflow 0 -200,000 1 65,000 2 72,000 3 95,000 4 0 5 0 6 0 7 0 8 0 9 0 10 0 11 0 12 0 Rate 10.00% NPV (10,030) IRR 7.30% PI 0.95 Payback 2.66 Sign reverses 2 4. Calculate the NPV Crossover Point. (16.19%) Crossover Point Calculation Project A Project B A - B 0 -1,500 -1,400 -100 1 925 925 0 2 925 790 135 3 0 0 0 4 0 0 0 5 0 0 0 Crossover Point (IRR of A-B) 16.19%...
View Full Document

{[ snackBarMessage ]}

### Page1 / 2

Ch_09_Inclass_Exercises_Solutions - Period Cashflow...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online