MICHAEL ANGELO H.

TUGAS

BSA-II

Cost 475,000

Delivery and setup costs 12,500

Total investment costs 487,500

Average income per year 104,000

Less :Average operating cost per year 6,500

Cash net income 97,500

Less:Depreciation costs 46,000

Net income 51,500

a.

Cash payback 487,500 / 97,500 = 5.00 years

b.

Present value of annual inflows 625,755

Present values of salvage value 11,605

Total present values 637,360

Initial cost of investment 487,500

Net present value 149,860

c.

Annual rate of return

51,500 / [(487,500 + 27,500) / 2] =

51,500 / 257,500 = 20%

9.2

Annual net income 30,000

Annual cash flows 78,000

Cost of investment 240,000

a.

Payback 240,000/78,000 = 3.08 years

b.

Total Present values 78,000 x 3.791 295,698

Initial cost of investment 240,000

Net Present value 55,698

c.

Annual rate of return 30,000 / [(240,000 + 0) / 2]=

30,000 / 120,000 = 25%

9.3 RED BLUE

Annual net income 30,000 50,000

Add:back depreciation Red:400,000/8 years = 50,000

Blue:560,000/8 years = 70,000

Annual cash flows 80,000 120,000

a.

Payback,in years

Red:400,000/80,000 5

Blue:560,000/120,000 4.67

b.

Total present values Red 80,000 x 5.747 459,760

Blue 120,000 x 5.747 689,640

Initial investment cost 400,000 560,000

Net present values 59,760 129,640

c.

Annual rate of return Net income 1 30,000 50,000

Average investments(Cost /2) 2 200,000 280,000

ARR (1/2) 0.15 0,18

9.4

Net income 64,000

Depreciation 52,500

Net cash inflows per year 116,500

Present value factor at 13% for 12 years 5.9176

Total present values 689,400.40

Initial cost of investment 630,000

a. Net present values 59,400.40

b.

Internal rate of return

PV Factor = 630,000/116,500 = 5.408

12 years line scanned,5.4077 equivalent to 15%

At 14% 5.660 5.660

PV Factor = 5.408

At 16% 5.197

0.463 0.252

Exact rate = 14% + .01089 = 0.15089 15.089%

c.

Payback 630,000/116,500 = 5.408 years

9.5 Cashflows
COOL HOT
Year PVF at 12%
Cashflows PV of cashflows Cashflows PV of cashflows
1 0.893 38,000 33,934 42,000 37,506

2 0.797 42,000 33,474 42,000 33,474

3 0.712 48,000 34,176 42,000 29,904

128,000 101,584 126,000 100,884

Cost of investments 90,000 90,000

a.Net present value 11,584 10,884

b.

Profitability index = PV/COST 1.13 1.12

c.

Both are acceptable,But COOL is more preferrable because of its high NVP and PI