Scribd Logo
Upload

Welcome to Scribd!

  • Year CF 0 - 100 1 70 2 50

    Uploaded by

    29chintanshah
    4 views7 pages
    This document contains information about cash flows and net present value calculations for multiple projects over several years. It compares the internal rate of return for 4 different projects with varying cash flows. Project 3 has the highest IRR at 36% but the maximum allowed risk is 25%, so Project 4 would be selected, which has an IRR of 22% and risk of 28%, within the risk tolerance.

    Original Description:

    Original Title

    IRR

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document contains information about cash flows and net present value calculations for multiple projects over several years. It compares the internal rate of return for 4 different projects with varying cash flows. Project 3 has the highest IRR at 36% but the maximum allowed risk is 25%, so Project 4 would be selected, which has an IRR of 22% and risk of 28%, within the risk tolerance.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    4 views7 pages

    Year CF 0 - 100 1 70 2 50

    Uploaded by

    29chintanshah
    This document contains information about cash flows and net present value calculations for multiple projects over several years. It compares the internal rate of return for 4 different projects with varying cash flows. Project 3 has the highest IRR at 36% but the maximum allowed risk is 25%, so Project 4 would be selected, which has an IRR of 22% and risk of 28%, within the risk tolerance.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 7

    Year

    CF
    0
    1
    2

    -100
    70
    50

    0
    3
    6
    9
    12

    1
    0
    NPV
    0
    3
    6
    9
    12

    -100
    40
    40
    40
    40

    -100
    40
    40
    40
    40

    0.99
    5

    -100
    40
    40
    40
    40
    21.86%
    0.87
    21.8623% 87.4491%
    0.98
    10

    0.96
    15

    Qtrs

    CF
    0
    1
    2
    3
    4

    100

    interst amt return


    CB
    87.45%
    40

    CB=OB+interst amt-return

    10
    0
    6
    12
    18

    -100
    60
    50
    30
    21.48%
    42.97%

    20

    erst amt-return

    0
    1
    2
    3
    4

    30

    -100
    60
    70
    -10
    5
    16.08%

    YEARS

    CF1
    0
    1
    2
    3
    4

    CF2
    -100
    30
    40
    30
    30

    -100
    -70
    -30
    0
    30

    -100
    50
    60
    -30
    50

    -100
    -50
    10
    -20
    30

    SINCE U R REINVESTING IT IS BETWEEN -20 AND 30


    3
    X
    4

    -20
    0
    30

    SLOPE OF LINE
    X-3/4-3
    EQUALS

    WEEN -20 AND 30

    YEEARS

    P1 CF
    0
    1
    2
    3

    irr
    Selected
    risk

    P2CF
    -100
    70
    50
    30
    28%
    1
    20%

    P3CF
    -100
    60
    60
    60
    36%
    1
    30%

    P4 CF
    -100
    80
    0
    40
    12%
    1
    35%

    -100
    40
    50
    60
    22%
    1
    28%

    Total avaibale capital


    Risk<=25%
    which project is to be selected?

    4
    0.07

    300

    to be selected?

    You might also like