Quiz 3 Version B

A
1
2
3

Project X

Year

5
6
7
8
9
10
11
12

0
1
2
3
4
5

Cash Flows
(60,000.00)
15,000.00
17,500.00
15,000.00
15,500.00
17,500.00

Discount Rate

Cumulative Cash
Flows
(60,000.00)
(45,000.00)
(27,500.00)
(12,500.00)
3,000.00
20,500.00

Sum

Payback
period

13
14
15
16
17
18

PV Factor
1.000000
0.898876
0.807979
0.726273
0.652830
0.586813
3.672771

Present Value
of Cash Flows
(60,000.00)
13,483.15
14,139.63
10,894.10
10,118.86
10,269.23
58,904.96

Discounted
Payback Period

=4+(-C$9/B$10)

1 of 5

Cumulative
Present Value of
Cash Flows

NPV

Future value
facture for TV
Calculation

Terminal Value
Computation

IRR

11.2500%

(60,000.00)
(46,516.85)
(32,377.23)
(21,483.13)
(11,364.27)
(1,095.04)

More than 5
years because
project have
negative NPV

3.83
2 Points

2 Points

Project Y

19

Year

20
21
22
23
24
25
26
27

0
1
2
3
4
5

Cash Flows
(50,000.00)
14,000.00
12,500.00
13,000.00
17,500.00
15,000.00

Discount Rate
Cumulative Cash
Flows
(50,000.00)
(36,000.00)
(23,500.00)
(10,500.00)
7,000.00
22,000.00

Sum

Payback
period

28
29
30
31
32

Key to Quiz 4

PV Factor
1.000000
0.898876
0.807979
0.726273
0.652830
0.586813
3.672771

=4+(-C$24/B$25)

Part B

LSE

From
Discounted
Payback
calculation
(1,095.04)
2 Points

MIRR

22,976.89
24,095.62
18,564.84
17,243.75
17,500.00
100,381.11

=((I11/-B5)^(1/A10))-1 =IRR(B$5:B$10,E$2)
10.84%
2 Points

10.5280%
1 Points

Terminal Value
Computation

IRR

11.2500%
Cumulative
Present Value of
Cash Flows
(50,000.00)
(50,000.00)
12,584.27
(37,415.73)
10,099.73
(27,316.00)
9,441.55
(17,874.45)
11,424.52
(6,449.93)
8,802.20
2,352.27
52,352.27

Present Value
of Cash Flows

Discounted
Payback Period

4.73

3.53
2 Points

1.531793
1.376893
1.237656
1.112500
1.000000

2 Points

Accept project Y because it has a higher NPV.

NPV

Future value
facture for TV
Calculation
1.531793
1.376893
1.237656
1.112500
1.000000

From
Discounted
Payback
calculation
2,352.27
2 Points

MIRR

21,445.10
17,211.16
16,089.53
19,468.75
15,000.00
89,214.54

=((I11/-B5)^(1/A10))-1

=IRR(B$20:B$25,E$2
)

12.28%
2 Points

13.0498%
1 Points

1 Point

Dr Farooq Chaudhry

Spring Semester 2011

Name: ______________________________
Section:_____________
A
1
2
3

Project X

Year

5
6
7
8
9
10
11
12

0
1
2
3
4
5

Cash Flows
(25,000.00)
5,000.00
7,500.00
10,000.00
12,500.00
15,000.00

Discount Rate

Cumulative Cash
Flows
(25,000.00)
(20,000.00)
(12,500.00)
(2,500.00)
10,000.00
25,000.00

Sum

Payback
period

13
14
15
16
17
18

PV Factor
1.000000
0.907029
0.822702
0.746215
0.676839
0.613913
3.766700

Present Value
of Cash Flows
(25,000.00)
4,535.15
6,170.27
7,462.15
8,460.49
9,208.70
35,836.76

Discounted
Payback Period

=3+(-C8/B9)

Project Y

Year

20
21
22
23
24
25
26
27

0
1
2
3
4
5

Cash Flows
(30,000.00)
15,000.00
12,500.00
10,000.00
7,500.00
5,000.00

(30,000.00)
(15,000.00)
(2,500.00)
7,500.00
15,000.00
20,000.00

Sum

Payback
period

28

Cumulative
Present Value of
Cash Flows

NPV

Future value
facture for TV
Calculation

Terminal Value
Computation

IRR

(25,000.00)
(20,464.85)
(14,294.58)
(6,832.43)
1,628.06
10,836.76

=4+(-F9/E10)
3.8232
2 Points

Discount Rate
Cumulative Cash
Flows

2 of 5

10.2500%

3.2000
2 Points

19

29
30
31
32

Quiz 4

PV Factor
1.000000
0.907029
0.822702
0.746215
0.676839
0.613913
3.766700

=3+(-C$23/B$24)

Part B

LSE

From
Discounted
Payback
calculation
10,836.76
2 Points

MIRR

7,387.28
10,050.72
12,155.06
13,781.25
15,000.00
58,374.31

=((I11/-B5)^(1/A10))-1 =IRR(B$5:B$10,E$2)
0.1848
2 Points

23.2919%
1 Points

10.2500%
Cumulative
Present Value of
Cash Flows
(30,000.00)
(30,000.00)
13,605.44
(16,394.56)
10,283.78
(6,110.78)
7,462.15
1,351.38
5,076.30
6,427.67
3,069.57
9,497.24
39,497.24

Present Value
of Cash Flows

Discounted
Payback Period

=4+(-F$24/E$25)

2.25
2 Points

1.477455
1.340096
1.215506
1.102500
1.000000

2.81
2 Points

NPV

Future value
facture for TV
Calculation
1.477455
1.340096
1.215506
1.102500
1.000000

From
Discounted
Payback
calculation
9,497.24
2 Points

MIRR

Terminal Value
Computation

IRR

22,161.83
16,751.20
12,155.06
8,268.75
5,000.00
64,336.84

=((I11/-B5)^(1/A10))-1
0.1648
2 Points

=IRR(B$20:B$25,E$2
)
24.6696%
1 Points

Accept Project X because it has a higher NPV

Dr Farooq Chaudhry

Fall Semester 2012