Calculate the net present value-payback

Reference no: EM13746739

(Part 1)

Using a 5% discount rate, calculate the Net Present Value, Payback, Profitability Index, and IRR for each of the investment projects below (note, the inflows are for each year). Based on your calculations rank the projects and support you answer.

Project 1

Initial Invest= $500,000, Cash inflows of $100,000 for years 1-5 and $50,000 for years 6-10.

Project 2

Initial Invest= $1,000,000, Cash inflows of $400,000 for years 1-3, $0 for years 4-7 and $250,000 for years 8-10.

Project 3

Initial Invest= $800,000, Cash inflows of $300,000 for years 1-5, $0 for years 6-9 and $100,000 for year 10.

(Part 2)

Assuming a budget of $1,200,000 what are your recommendations for the three projects in the above problem. Explain.

Assuming a budget of $2,000,000 what are your recommendations for the above problem? Explain.

Reference no: EM13746739

Questions Cloud

Benefits of the planning stage for managers : Discuss one to two (1-2) benefits of the planning stage for managers. Next, describe your planning process at work or school. Your response should include how you know when you need to develop a plan, how long you take to plan for a project or wor..

Write an essay on franz schuberts ave marias piece of music : Write an essay on Franz Schubert's Ave Maria's piece of music.

Product rule for exponents : Explain in your own words why the Product Rule for Exponents "works." Not just the definition of an exponent. (NOT a^3 = axaxa)

Explain constitutional convention held in philadelphia : provide a brief overview of the Constitutional Convention held in Philadelphia in May 1787 from the perspective of any one of the delegates that represented a colony.

Calculate the net present value-payback : Using a 5% discount rate, calculate the Net Present Value, Payback, Profitability Index, and IRR for each of the investment projects below (note, the inflows are for each year). Based on your calculations rank the projects and support you answer.

Explain relation between religion and philosophy in islamic : what can we say about the relationship between religion and philosophy in Islamic circles? In Christian Renaissance circles?

Budgeting implications of different option : In this assignment, you are to discuss the budgeting implications of different option strategies and the cost-benefit issues associated with such decisions.

Complete strategic growth plan for exxon mobil organization : Complete a comprehensive strategic plan Powerpoint presentation showing your complete strategic growth plan for Exxon Mobil organization

Calculate the labor-force participation rate : Calculate the working-age population as percentage of the population and calculate the labor-force participation rate.

User Account

All Pages