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Year
Net Cash flow ($)
PVIF
PV ($)
1
2569000
0.865469365
2223391
2
3220000
0.749037221
2411900
3
0.648269768
2087425
4
0.561056759
1806603
5
0.485577437
1563559
6
0.420252396
1353213
7
0.363715574
1171164
8
0.314784687
1013607
9
0.272436503
877246
10
0.235785447
759229
11
0.204065081
657090
12
0.176612076
568691
13
0.152852341
492185
14
0.132289019
425971
15
0.114492093
368665
16
0.099089399
319068
17
0.085758839
276143
18
0.074221648
238994
19
0.064236563
206842
20
0.055594777
179015
PV=$18,999,999
Project Cost: $19,000,000
Internal Rate of Return: $15.54424%
Use a 4.5% higher discount rate for the RADF method
CECF Approach:
Year 1:96%
Year 11:39%
Year 2:91%
Year 12:33%
Year 3:85%
Year 13:29%
Year 4:79%
Year 14:26%
Year 5:74%
Year 15:23%
Year 6:68%
Year 16:20%
Year 7:62%
Year 17:18%
Year 8:56%
Year 18:1 5%
Year 9:50%
Year 19:13%
Year 10:45%
Year 20:12%
Other information: APR: 8.25% Equity:15% (regular Projects) Debt:48%: Equity:52%
Question
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