136 million And An NPV of 13136 million Solution PI PV of future cash flows

136 million and an npv of 13136 million solution pi

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A present value of future cash flows of $63.136 millionAnd, An NPV of 13.136 millionSolution:PI= PV of future cash flows = 63.136 = 1.26Initial Investment 50
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Or,PI= 1 + NPV = 1 + 13.136 = 1.26Initial Investment 50If PI > 1, then it means the investment is profitable (accept).If PI < 1, then it means the investment is not profitable (reject). If PI = 1, then investment is breaking even, company can accept it depending on the objectives of the company and expectations of whether investment will give profitable returns after the projected period.
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MODIFIED INTERNAL RATE OF RETURN (MIRR)The modified internal rate of return(MIRR) is a financialmeasure of an investment's attractiveness.It is used in capital budgetingto rank alternative investments of equal size. As the name implies, MIRR is a modification of the internal rate of return(IRR) and as such aims to resolve some problems with the IRR.It can be used to compare different investments as well.
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CALCULATION STEP 1 - The future value of positive cash flows discounted at the reinvestment rate, also known as “Terminal Value” STEP 2 - The present value of negative cash flows discounted at the financing rateSTEP 3 – The number of periods
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FORMULAE
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