a) | Net Present Value - Project A | ||||
Discount Rate | 8% | ||||
Year | Particular | Cashflow | Discounting Factor @% | Discounted Cash Flow | |
a | b | c | d | e=d*c | |
0 | Initial Cost | $ -1,15,000 | 1.000 | $ -1,15,000.00 | |
1 | Annual Cash Inflows | $ 54,593 | 0.926 | $ 50,549.07 | |
2 | Annual Cash Inflows | $ 54,593 | 0.857 | $ 46,804.70 | |
3 | Annual Cash Inflows | $ 54,593 | 0.794 | $ 43,337.68 | |
4 | NPV | $ 25,691.46 | |||
Therefore Net Present Value Of Project | $ 25,691.46 | ||||
Net Present Value - Project B | |||||
Year | Particular | Cashflow | Discounting Factor @8% | Discounted Cash Flow | |
a | b | c | d | e=d*c | |
0 | Initial Cost | $ -41,000 | 1.000 | $ -41,000.00 | |
1 | Annual Cash Inflows | $ 17,070 | 0.926 | $ 15,805.56 | |
2 | Annual Cash Inflows | $ 17,070 | 0.857 | $ 14,634.77 | |
3 | Annual Cash Inflows | $ 17,070 | 0.794 | $ 13,550.72 | |
4 | NPV | $ 2,991.05 | |||
Therefore Net Present Value Of Project | $ 2,991.05 | ||||
Project A should be accepted | |||||
B) | |||||
IRR Using Excel | |||||
Project A | 20.00% | ||||
Project B | 12.00% | ||||
Project A should be accepted | |||||
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