Using excel formula to calculate
M | N | ||
Year | Project M | Project N | |
1 | 0 | -3000 | -9000 |
2 | 1 | 1000 | 2800 |
3 | 2 | 1000 | 2800 |
4 | 3 | 1000 | 2800 |
5 | 4 | 1000 | 2800 |
6 | 5 | 1000 | 2800 |
NPV | $517.23 | $848.25 | |
Using excel formula | NPV(0.13,A2:A6)+A1 | NPV(0.13,B2:B6)+B1 | |
IRR | 19.86% | 16.80% | |
Using excel formula | IRR(A1:A6) | IRR(B1:B6) | |
MIRR | 16.65% | 15.05% | |
Using excel formula | MIRR(A1:A6,13%,13%) | MIRR(B1:B6,13%,13%) |
Payback Period
Year | 0.00 | 1 | 2 | 3 | 4 | 5 |
Project A | -3000.00 | 1000 | 1000 | 1000 | 1000 | 1000 |
Cumulative Cash flow | -3000.00 | -$2,000.00 | -$1,000.00 | $0.00 | $1,000.00 | $2,000.00 |
Payback Period | 3.00 | |||||
excel formula | (3+0/1000) | |||||
Year | 0.00 | 1 | 2 | 3 | 4 | 5 |
Project A | -9000.00 | 2800 | 2800 | 2800 | 2800 | 2800 |
Cumulative Cash flow | -9000.00 | -$6,200.00 | -$3,400.00 | -$600.00 | $2,200.00 | $5,000.00 |
Payback Period | 3.21 | |||||
excel formula | (=3+600/2800) |
cumulative Cash flow | 0.00 | 1 | 2 | 3 | 4 | 5 |
Project A | -3000.00 | 1000 | 1000 | 1000 | 1000 | 1000 |
Discounted Cash Flow | -3000.00 | 884.96 | 783.15 | 693.05 | 613.32 | 542.76 |
Cumulative Cash flow | -3000.00 | -$2,115.04 | -$1,331.90 | -$638.85 | -$25.53 | $517.23 |
Discounted Payback Period | 4.04 | |||||
excel formula | 4+25.53/542.76 | |||||
Year | 0.00 | 1 | 2 | 3 | 4 | 5 |
Project A | -9000.00 | 2800 | 2800 | 2800 | 2800 | 2800 |
Discounted Cash Flow | -9000.00 | 2477.88 | 2192.81 | 1940.54 | 1717.29 | 1519.73 |
Cumulative Cash flow | -9000.00 | -$6,522.12 | -$4,329.31 | -$2,388.77 | -$671.48 | $848.25 |
Discounted Payback Period | 4.44 | |||||
excel formula | 4+671.48/1519.73 |
b. If Project is independent both projects should be selected as
they have positive NPV.
c.If Project is mutually exclusive Project N should be selected as
they have higher NPV.
d.Conflict between NPV and IRR due to difference in size of
projects between M and N
A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax...
A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 1 2 34 5 Project M Project N -$18,000 $6,000 $6,000 $6,000 $6,000 $6,000 -$54,000 $16,800 $16,800 $16,800 $16,800 $16,800 a. Calculate NPV for each project. Do not round intermediate calculations. Round your answers to the nearest cent. Project M: $ Project N: $ Calculate IRR for each project. Do not round intermediate calculations. Round your answers...
A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 23 5 Project M Project N - $30,000 $10,000 $10,000 $10,000 $10,000 $10,000 - $90,000 $28,000 $28,000 $28,000 $28,000 $28,000 a. Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ Project N $ Calculate IRR for each project. Round your answers to two...
A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: Project M Project N -$18,000 $6,000 $6,000 $6,000 $6,000 $6,000 -$54,000 $16,800 $16,800 $16,800 $16,800 $16,800 a. Calculate NPV for each project. Do not round intermediate calculations. Round your answers to the nearest cent. Project M: $ Project N: $ Calculate IRR for each project. Do not round Intermediate calculations. Round your answers to two decimal places....
A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project M Project N - $12,000 $4,000 $4,000 $4,000 $4,000 $4,000 -$36,000 $11,200 $11,200 $11,200 $11,200 $11,200 a. Calculate NPV for each project. Do not round intermediate calculations. Round your answers to the nearest cent. Project M: $ Project N: $ Calculate IRR for each project. Do not round intermediate calculations....
A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project M -$21,000 $7,000 $7,000 $7,000 $7,000 $7,000 Project N -$63,000 $19,600 $19,600 $19,600 $19,600 $19,600 Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ Project N $ Calculate IRR for each project. Round your answers to two decimal places. Do...
A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project M $(21,000) $7,000 $7,000 $7,000 $7,000 $7,000 Project N $(63,000) $19,600 $19,600 $19,600 $19,600 $19,600 Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ Project N $ Calculate IRR for each project. Round your answers to two decimal places. Do...
CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: Project M $3,000 $1,000 $1,000 $1,000 $1,000 $1,000 Project N $9,000 $2,800 $2,800 $2,800 $2,800 $2,800 a. Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ Project N $ Calculate IRR for each project. Round your answers to two decimal places. Do...
A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: Project M -$24,000 $8,000 $8,000 $8,000 $8,000 $8,000 Project N -$72,000 $22,400 $22,400 $22,400 $22,400 $22,400 Calculate NPV for each project. Do not round intermediate calculations. Round your answers to the nearest cent. Project M: $ Project N: $ Calculate IRR for each project. Do not round intermediate calculations. Round your answers to two decimal places. Project M: % Project...
A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project M - $24,000 $8,000 $8,000 $8,000 $8,000 $8,000 Project N -$72,000 $22,400 $22,400 $22,400 $22,400 $22,400 a. Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ Project N $ Calculate IRR for each project. Round your answers to...
A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project M -$24,000 $8,000 $8,000 $8,000 $8,000 $8,000 Project N -$72,000 $22,400 $22,400 $22,400 $22,400 $22,400 Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M $ Project N $ Calculate IRR for each project. Round your answers to two decimal places. Do...