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Part A | ||||||
Year | Cash Inflow | Cummulative Cash Inflow | ||||
1 | $ 60,000 | $ 60,000 | ||||
2 | $ 80,000 | $ 140,000 | ||||
3 | $ 100,000 | $ 240,000 | ||||
4 | $ 120,000 | $ 360,000 | ||||
5 | $ 140,000 | $ 500,000 | ||||
Payback Period | Years before Recovery+ | Unrecovered Cost at start of the year/Cash Flow during the Next year | ||||
Years before Recovery | 3 | |||||
Unrecovered Cost | $300,000-$240,000 | $ 60,000 | ||||
Cash Flow during year 4 | $ 360,000 | |||||
Payback Period | 3+($60,000/$360,000) | |||||
3.17 | Years | |||||
Part B | ||||||
Year | Cash Flow | PVF 15% | Discounted Cash Flow | Cumulative DCF | ||
0 | $ -300,000 | 1.00000 | $ -300,000 | $ -300,000 | ||
1 | $ 60,000 | 0.86957 | $ 52,174 | $ -247,826 | ||
2 | $ 80,000 | 0.75614 | $ 60,491 | $ -187,335 | ||
3 | $ 100,000 | 0.65752 | $ 65,752 | $ -121,583 | ||
4 | $ 120,000 | 0.57175 | $ 68,610 | $ -52,973 | ||
5 | $ 140,000 | 0.49718 | $ 69,605 | $ 16,632 | ||
Discounted Payback Period | 4 Year+(52,973/69,605) | 4.76 | Years | |||
Part c | ||||||
Year | Cash Flow | |||||
0 | $ -300,000 | |||||
1 | $ 60,000 | |||||
2 | $ 80,000 | |||||
3 | $ 100,000 | |||||
4 | $ 120,000 | |||||
5 | $ 140,000 | |||||
IRR(B36:B41) | ||||||
IRR | 17.01% | |||||
Part d | ||||||
Year | Cash Flow | PVF 15% | Discounted Cash Flow | |||
0 | $ -300,000 | 1.00000 | $ -300,000 | |||
1 | $ 60,000 | 0.86957 | $ 52,174 | |||
2 | $ 80,000 | 0.75614 | $ 60,491 | |||
3 | $ 100,000 | 0.65752 | $ 65,752 | |||
4 | $ 120,000 | 0.57175 | $ 68,610 | |||
5 | $ 140,000 | 0.49718 | $ 69,605 | |||
Net Present Value | $ 16,632 |
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