Year

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

Cumulative
Annual
Annual
Value of
Income from
Expenditure Investment Investment
50,000
50,000
0
2,000,000
2,050,000
0
10,000,000 12,050,000
0
15,000,000 27,050,000
0
7,000,000 34,050,000
0
2,000,000 36,050,000
50,000
500,000 36,550,000 10,000,000
500,000 37,050,000 15,000,000
500,000 37,550,000 20,000,000
500,000 38,050,000 30,000,000
500,000 38,550,000 45,000,000
500,000 39,050,000 50,000,000
500,000 39,550,000 25,000,000
700,000 40,250,000 10,000,000
2,000,000 42,250,000 10,000,000
500,000 42,750,000 10,000,000
12,000,000 54,750,000
50,000

Cumulative
ROI
0
0
0
0
0
50,000
10,050,000
25,050,000
45,050,000
75,050,000
120,050,000
170,050,000
195,050,000
205,050,000
215,050,000
225,050,000
225,100,000

Discount
Rate
(4%)
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04

Question 2
250,000,000

200,000,000

150,000,000

100,000,000

50,000,000

10

12

14

Annual Expenditure

Cumulative Value of Investment

Annual Income from Investment

Cumulative ROI

Question 3b
250,000,000

16

Question 3b
250,000,000

200,000,000

150,000,000

100,000,000

50,000,000

10

-50,000,000
Annual Expenditure

Cumulative Value of Investment

Annu

Cumulative ROI

Annual NPV

Cumu

Discount Net Annual

Factor
Cash Flow
Annual NPV
0.962
-50,000.00
-48,076.92
0.925
-2,000,000.00 -1,849,112.43
0.889
-10,000,000.00 -8,889,963.59
0.855
-15,000,000.00 -12,822,062.87
0.822
-7,000,000.00 -5,753,489.75
0.790
-1,950,000.00 -1,541,113.33
0.760
9,500,000.00
7,219,219.23
0.731
14,500,000.00 10,595,007.97
0.703
19,500,000.00 13,700,441.34
0.676
29,500,000.00 19,929,142.98
0.650
44,500,000.00 28,906,351.45
0.625
49,500,000.00 30,917,553.95
0.601
24,500,000.00 14,714,065.11
0.577
9,300,000.00
5,370,518.27
0.555
8,000,000.00
4,442,116.02
0.534
9,500,000.00
5,072,127.67
0.513
-11,950,000.00 -6,134,810.29

12

14

ive Value of Investment

ive ROI

uestion 3b

16

18

Cumulative
NPV
-48,076.92
-1,897,189.35
-10,787,152.94
-23,609,215.80
-29,362,705.55
-30,903,818.87
-23,684,599.65
-13,089,591.68
610,849.67
20,539,992.65
49,446,344.10
80,363,898.06
95,077,963.17
100,448,481.44
104,890,597.46
109,962,725.13
103,827,914.84

uestion 3b

10

Value of Investment

12

14

16

Annual Income from Investment

Cumulative NPV

18

Discounted Cash Flow

A project will require the following phased financial commitment and the expected income s
Caluculate Annual Expenditure, Cumulative Value of Investment, Annual Income from Inve
Generate a graph showing the Annual Expenditure, Value of Investment, Annual Income an
Assuming a discount rate of 4% calculate the NPV on both annual and cumulative bases an
What is the payback period according to the NPV figures?
What is the NPV of the project?

Year
1
2
3
Annual Expenditure
50,000 2,000,000 10,000,000
Annual Income from Investm
0
0
0

ment and the expected income shown below.

ment, Annual Income from Investment and cumulative ROI.
Investment, Annual Income and Cumulative ROI.
nnual and cumulative bases and add this information to the graph above.

4
5
6
7
8
9
15,000,000 7,000,000 2,000,000
500,000
500,000
500,000
0
0
50,000 10,000,000 15,000,000 20,000,000

10
11
12
13
14
15
500,000
500,000
500,000
500,000
700,000 2,000,000
30,000,000 45,000,000 50,000,000 25,000,000 10,000,000 10,000,000

16
17
500,000 12,000,000
10,000,000
50,000