Question

1. Given the following set of cash flows for a project, calculate the NPV, PI, IRR, MIRR, Payback, Discounted Payback and Accounting Rate of Return. Assume a cost of capital of 10%. Assuming that this is an independent project, should the project be accepted? Why or why not? (20 pts.)

Year                Cash Flow                 Net Profit                   Depreciation

0                    -$125,000

1                    $22,000                     $15,000                      $10,000

2                    $58,000                     $43,000                      $25,000

3                    -$30,000                   $24,000                      $21,000

4                    $35,000                     $28,000                      $18,000

5                    $28,000                     $20,000                      $15,000

6                    $60,000                      $52,000                      $11,000

and now Construct an NPV profile for the project above and explain what you find

Answer 1

As per rules I am answering the first 4 subparts of the question

NPV	-4445.86
PI	0.9644
IRR	8.91%
MIRR	9.44%

WORKINGS

Book1 - Excel Sign in AutoSave CH File Home Insert H Draw Page Layout Formulas Data Review View Help Tell me what you want to do Share Comments - A Calibri - Insert - 2X Delete- Format - -11AA = = BIU. 3- A E S Font to General $ -% Paste E E u Clipboard Conditional Format as Formatting Table - Styles Cell Styles Sort & Find & Filter - Select Editing Alignment Number Cells D2 А в C D Year NPV Cash flows -125000 22000 58000 -30000 35000 28000 60000 =NPV(10%,C4:09)+C3 =NPV(10%,C4:09)/-C3 =IRR(C3:09) =MIRR(C3:09,10%,10%) IRR MIRR 15 16 17 Sheet1 Sheet2 Sheet3 Sheet4 Sheet5 Sheet6 Sheet7 © Ready