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(Excel) Assume that two investments...(See picture below, please solve in excel and show formulas used, Thank you :) )

3. (Excel) Assume that two investments each cost $90000 initially. The returns are as follows: Investment End of year Type B.

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Answer #1
A B
a Payback 5.19 5.18
b NPV $14,988.53 $13,119.84
c IRR 11.24% 10.88%

Workings

Year A Cumulative CF B Cumulative CF
0 -90000 -90000 -90000 -90000
1 14440 -75560 16000 -74000
2 15015 -60545 16000 -58000
3 15615 -44930 16000 -42000
4 16240 -28690 16000 -26000
5 16890 -11800 16000 -10000
6 62565 50765 57000 47000

Payback = Year in which Cumulative CF is last negative -(Last negative cumulative CF/ CF of next year

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