I need to find the risk-adjusted present value for Project E, F, and G. Please show the work in Excel.
initial investment(Cfo) | -14600 | -11000 | -18200 |
1 | 6500 | 6400 | 3500 |
2 | 6500 | 4400 | 6600 |
3 | 6500 | 4700 | 7700 |
4 | 6500 | 1800 | 12100 |
Risk Index(Rfi) | 1.77 | 0.98 | 0.57 |
NPV | $3,994.96 | $2,034.03 | $1,863.80 |
Radj=Rf+Rfi(R-Rf) | 18.75% | 14.80% | 12.75% |
NPV with Radj | $2,633.45 | $2,056.40 | $2,955.19 |
Formula to calculate value of NPV
NPV=(Rate=18.75%, year 1 value=6500, year 2 value=6500, year 3value=6500, year 4 value= 6500)-year 0 value i.e. 14600 |
NPV= 14600+6500/1.1875+ 6500/(1.1875)^2+ 6500/(1.1875)^3+ 6500 /(1.1875)^4 |
So project G with NPV=$2,955.19 is better
I need to find the risk-adjusted present value for Project E, F, and G. Please show the work in E...
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