# Finance Work Section 17 Trouble Questions a couple of, 4, your five

2 . Discover the NPV and PI of an annuity that pays off \$500 per year for 8-10 years and costs \$2, 500. Believe a discount price of six percent. \$500*8)*0. 94^8-2, five-hundred (\$4, 000)*0. 6095-2, 500

2438-2, 500=-\$62. 00

The NPV is -\$62. 00

PI:

PV / Cost (\$3104. 90 / \$2500) 1 ) 24196

The PI is usually 1 . 24196.

4. Locate the IRR and MIRR of a task if it offers estimated cash flows of \$5, 500 annually intended for seven years if the year zero's investment is \$25, 000. PV of \$5, 500 = preliminary investment sama dengan \$25, 1000

let IRR = 3rd there’s r

PV of \$5, five-hundred =

= twenty-five, 000

solving it in all of us getВ

IRR = r = 12%

MIRR sama dengan В - 1В

FV of in flow with rate of IRR =В

sama dengan 5500((1. 12)^7 - 1 )/0. 12В В В В В В В В В В В В В В В В В В В В В = \$55489. 56 MIRR =В В - 1= 1 . 12 06= В 0. 1206В

therefore MIRR = 12. 06%

5. To get the following tasks, compute NPV, IRR, MIRR, profitability index, and repayment. If these kinds of projects are mutually exclusive, which usually one(s) must be done? If they are self-employed, which one(s) should be carried out?

a. n. c. g.

Year 0вЂ“ 1, 000вЂ“1, 500вЂ“500вЂ“2, 500

Year 1400500100600

Year 2400500300800

Year 3400700250200

Year 4400200200300

Discount rate10%12%15%8%

NPV of project A =-1000 & 400/1. one particular + 400/1. 1^2 & 400/1. 1^3 + 400/1. 1^4 =\$267. 946

PI of Job A =( 400/1. 1 + 400/1. 1^2 + 400/1. 1^3 + 400/1. 1^4)/1000 =1. 268

NPV of Task B = -1, 500 +500/1. doze +500/1. 12^2 + 700/1. 12^3 & 200/1. 12^4 =-29. 6247 PI of Project M =(500/1. 12 +500/1. 12^2 + 700/1. 12^3 + 200/1. 12^4 )/1500 =0. 980

NPV of Task C =-500 +100/1. 15 + 300/1. 15^2 +250/1. 15^3 + 200/1. 15^4 =92. 529 PI of Project C =(100/1. 15 + 300/1. 15^2 +250/1. 15^3 & 200/1. 15^4)/500 =1. 1851

NPV of Project D =-2000+ 600/1. 08 & 800/1. 08^2 + 200/1. 08^3+ 300/1. 08^4 =-379. 30 PI... ## Bus 350 email Dissertation

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